KRE vs XLF Stock Comparison: AI Score, Valuation, Performance and Upside
KRE and XLF both provide financial sector exposure but with very different compositions. KRE is a pure-play on 140+ US regional banks equally weighted — maximum regional bank cycle leverage. XLF is a diversified financial sector fund including mega-banks, insurance, payment networks, and asset managers. KRE offers concentrated regional bank exposure for targeted bets on bank sector; XLF offers broad financial sector diversification. KRE has higher volatility and more regional bank-specific risk; XLF has more stability from diversification.
KRE vs XLF — SPDR S&P Regional Banking ETF (140+ US regional banks equally weighted, providing maximum exposure to regional bank NIM environment, CRE credit quality, and deposit stability cycles) versus Financial Select Sector SPDR (broad S&P 500 financial sector with JPMorgan, Berkshire, Visa, Mastercard dominance providing diversified financial sector exposure).
XLF holds the edge across 3 of 5 key metrics in this comparison. KRE has delivered stronger 1-year price return (+12.61% vs +4.80% for XLF).
- want concentrated regional bank exposure for a specific bet on the US regional bank cycle — net interest margin expansion, steepening yield curve, or CRE credit normalization
- believe regional bank valuations are compelling (historically low price-to-book) and want undiluted exposure without mega-bank or payment network contamination
- are comfortable with higher volatility and 2023-style deposit flight risk in exchange for maximum regional bank cycle upside when conditions improve
- use KRE as a tactical allocation rather than core holding — positioning for specific financial sector macro themes
- want diversified financial sector exposure including mega-banks, insurance, payment networks, and asset managers through a single 0.09% ETF
- prefer mega-bank stability (JPMorgan, BofA, Wells Fargo) without the concentrated regional bank CRE exposure and deposit flight risk KRE carries
- use XLF as a financial sector allocation within a sector ETF portfolio alongside technology (XLK), healthcare (XLV), and other sectors
- value Visa/Mastercard secular payment growth within their financial sector allocation — XLF's payment network exposure provides non-bank financial growth
| Metric | KRE | XLF |
|---|---|---|
| ETF scorei | 58.0 | 55.0 |
| Latest closei | $72.75 | $55.86 |
| 1M returni | -3.00% | -2.82% |
| 6M returni | +16.75% | +14.80% |
| 1Y returni | +12.61% | +4.80% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | KRE | XLF |
|---|---|---|
| 1Y ago | $11.54K (+15.4%) started 2025-09-18 | $10.64K (+6.4%) started 2025-09-18 |
| 5Y ago | $15.51K (+55.1%) started 2021-09-20 | $18.16K (+81.6%) started 2021-09-20 |
| 10Y ago | $29.37K (+193.7%) started 2016-09-19 | $42.22K (+322.2%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | KRE | XLF |
|---|---|---|
| Expense ratioi | 0.35% | 0.08% |
| Total assets (AUM)i | $4.01B | $54.59B |
| Dividend yieldi | 2.17% | 1.40% |
| Trailing P/Ei | 12.47 | 15.84 |
| Betai | 0.90 | 0.88 |
| 52-week change | 12.61% | 4.80% |
| Metric | KRE | XLF |
|---|---|---|
| 1Y returni | +12.61% | +4.80% |
| 6M returni | +16.75% | +14.80% |
| 1M returni | -3.00% | -2.82% |
| 1Y Sharpe ratio | 0.45 | 0.09 |
| Betai | 0.90 | 0.88 |
| Dividend yieldi | 2.17% | 1.40% |
| 5Y CAGR | +6.04% | +10.68% |
Over the past year, KRE and XLF have moved strongly in the same direction (correlation of 0.70), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | KRE | XLF |
|---|---|---|---|
| 1Y | Growthi | +12.61% | +4.80% |
| CAGRi | +12.62% | +4.80% | |
| Volatilityi | 21.99% | 14.58% | |
| Sharpe ratioi | 0.45 | 0.09 | |
| Sortino ratioi | 0.62 | 0.12 | |
| Max drawdowni | 14.95% | 14.79% | |
| Current drawdowni | 6.65% | 4.61% | |
| Avg drawdowni | 4.54% | 4.40% | |
| Ulcer Indexi | 5.81% | 5.82% | |
| Max daily dropi | 6.20% | 3.35% | |
| Max wkly dropi | 7.64% | 4.81% | |
| 5Y | Growthi | +34.01% | +65.95% |
| CAGRi | +6.04% | +10.68% | |
| Volatilityi | 29.48% | 18.37% | |
| Sharpe ratioi | 0.19 | 0.40 | |
| Sortino ratioi | 0.28 | 0.57 | |
| Max drawdowni | 52.69% | 25.81% | |
| Current drawdowni | 6.65% | 4.61% | |
| Avg drawdowni | 20.23% | 7.80% | |
| Ulcer Indexi | 24.40% | 10.62% | |
| Max daily dropi | 12.31% | 7.32% | |
| Max wkly dropi | 25.83% | 12.19% | |
| 10Y | Growthi | +122.51% | +246.44% |
| CAGRi | +8.33% | +13.24% | |
| Volatilityi | 31.75% | 22.07% | |
| Sharpe ratioi | 0.27 | 0.47 | |
| Sortino ratioi | 0.39 | 0.67 | |
| Max drawdowni | 55.03% | 42.86% | |
| Current drawdowni | 6.65% | 4.61% | |
| Avg drawdowni | 16.75% | 7.58% | |
| Ulcer Indexi | 21.56% | 10.75% | |
| Max daily dropi | 15.49% | 13.71% | |
| Max wkly dropi | 26.25% | 22.99% |
| Category | KRE | XLF |
|---|---|---|
| Fund name | State Street SPDR S&P Regional Banking ETF | State Street Financial Select Sector SPDR ETF |
| Type | ETF | ETF |
| Expense ratioi | 0.35% | 0.08% |
| Total assets (AUM)i | $4.01B | $54.59B |
| Dividend yieldi | 2.17% | 1.40% |
- Equal weighting gives true regional bank exposure: KRE's equal weight prevents JPMorgan-sized companies from dominating — provides genuine small/mid regional bank factor exposure
- Net interest margin leverage: regional banks earn more when the yield curve steepens — KRE benefits significantly from favorable rate environments
- Economically sensitive value play: regional banks are correlated with economic expansion — loan growth, business formation, and housing activity all drive regional bank revenue
- Financial sector diversification beyond regional banks: XLF includes Visa, Mastercard, Berkshire, insurance companies (Progressive, Chubb, MetLife) and asset managers (BlackRock) — broader than pure bank exposure
- Mega-bank quality and stability: JPMorgan Chase, Bank of America, Wells Fargo in XLF have more diversified revenue than regional banks and survived 2023 regional bank stress without crisis
- Payment network exposure (Visa/Mastercard): XLF includes payment network duopoly in the financial sector allocation — secular growth businesses with different drivers than traditional banking
- Commercial real estate (CRE) exposure: regional banks hold large CRE loan portfolios — office building value declines post-COVID create potential loan losses that are still working through the system
- Deposit flight risk during banking stress: 2023's Silicon Valley Bank collapse and regional bank deposit flight showed regional banks' vulnerability to confidence crises — KRE fell 30%+ in early 2023
- Regulatory capital requirements increasing: post-SVB, regulators are requiring banks to hold more capital — constraining lending capacity and returns on equity
- JPMorgan dominance: JPMorgan and other mega-banks represent 40%+ of XLF — investors seeking regional bank or insurance exposure specifically get a diluted version through XLF
- Lower sensitivity to regional bank opportunities: when regional banks are particularly cheap vs mega-banks or have catalysts (steepening yield curve), XLF's diversification dilutes the regional bank thesis vs KRE
- Large cap-weight concentration in top 5 holdings: XLF's top 5 holdings represent 40%+ of the ETF — less diversified than the 140+ equal-weighted regional bank portfolio of KRE
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