XLF vs KRE Stock Comparison: AI Score, Valuation, Performance and Upside
XLF and KRE both provide financial sector exposure, but through very different compositions. XLF is a diversified financial ETF including payment networks, insurance, capital markets, and Berkshire alongside banks; KRE is a pure-play regional bank ETF. Investors who want to make a specific call on net interest margins and regional bank earnings should use KRE; investors who want broad financial sector exposure should use XLF.
XLF vs KRE is the choice between diversified financial sector exposure and concentrated regional bank risk — XLF smooths sector-specific volatility with diverse financial holdings, while KRE maximizes sensitivity to the regional bank earnings cycle and interest rate inflection points.
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).
- prefer diversified financial sector exposure including banks, insurance, payment networks, and capital markets
- value the very low 0.09% expense ratio for efficient broad financial sector access
- want financial sector exposure without the extreme concentration of regional bank credit cycle risk
- are comfortable with Berkshire Hathaway and Visa/Mastercard dampening pure banking return sensitivity
- prefer a pure-play regional banking ETF to maximize net interest margin and bank earnings cycle exposure
- value the equal-weight methodology that captures M&A premiums when regional banks are acquired
- want to make a targeted tactical bet on regional bank outperformance during rising rate or credit quality improvement cycles
- are comfortable with binary credit quality risk and deep drawdown potential during regional banking stress events
| Metric | XLF | KRE |
|---|---|---|
| ETF scorei | 55.0 | 58.0 |
| Latest closei | $55.86 | $72.75 |
| 1M returni | -2.82% | -3.00% |
| 6M returni | +14.80% | +16.75% |
| 1Y returni | +4.80% | +12.61% |
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 | XLF | KRE |
|---|---|---|
| 1Y ago | $10.64K (+6.4%) started 2025-09-18 | $11.54K (+15.4%) started 2025-09-18 |
| 5Y ago | $18.16K (+81.6%) started 2021-09-20 | $15.51K (+55.1%) started 2021-09-20 |
| 10Y ago | $42.22K (+322.2%) started 2016-09-19 | $29.37K (+193.7%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLF | KRE |
|---|---|---|
| Expense ratioi | 0.08% | 0.35% |
| Total assets (AUM)i | $54.59B | $4.01B |
| Dividend yieldi | 1.40% | 2.17% |
| Trailing P/Ei | 15.84 | 12.47 |
| Betai | 0.88 | 0.90 |
| 52-week change | 4.80% | 12.61% |
| Metric | XLF | KRE |
|---|---|---|
| 1Y returni | +4.80% | +12.61% |
| 6M returni | +14.80% | +16.75% |
| 1M returni | -2.82% | -3.00% |
| 1Y Sharpe ratio | 0.09 | 0.45 |
| Betai | 0.88 | 0.90 |
| Dividend yieldi | 1.40% | 2.17% |
| 5Y CAGR | +10.68% | +6.04% |
Over the past year, XLF and KRE 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 | XLF | KRE |
|---|---|---|---|
| 1Y | Growthi | +4.80% | +12.61% |
| CAGRi | +4.80% | +12.62% | |
| Volatilityi | 14.58% | 21.99% | |
| Sharpe ratioi | 0.09 | 0.45 | |
| Sortino ratioi | 0.12 | 0.62 | |
| Max drawdowni | 14.79% | 14.95% | |
| Current drawdowni | 4.61% | 6.65% | |
| Avg drawdowni | 4.40% | 4.54% | |
| Ulcer Indexi | 5.82% | 5.81% | |
| Max daily dropi | 3.35% | 6.20% | |
| Max wkly dropi | 4.81% | 7.64% | |
| 5Y | Growthi | +65.95% | +34.01% |
| CAGRi | +10.68% | +6.04% | |
| Volatilityi | 18.37% | 29.48% | |
| Sharpe ratioi | 0.40 | 0.19 | |
| Sortino ratioi | 0.57 | 0.28 | |
| Max drawdowni | 25.81% | 52.69% | |
| Current drawdowni | 4.61% | 6.65% | |
| Avg drawdowni | 7.80% | 20.23% | |
| Ulcer Indexi | 10.62% | 24.40% | |
| Max daily dropi | 7.32% | 12.31% | |
| Max wkly dropi | 12.19% | 25.83% | |
| 10Y | Growthi | +246.44% | +122.51% |
| CAGRi | +13.24% | +8.33% | |
| Volatilityi | 22.07% | 31.75% | |
| Sharpe ratioi | 0.47 | 0.27 | |
| Sortino ratioi | 0.67 | 0.39 | |
| Max drawdowni | 42.86% | 55.03% | |
| Current drawdowni | 4.61% | 6.65% | |
| Avg drawdowni | 7.58% | 16.75% | |
| Ulcer Indexi | 10.75% | 21.56% | |
| Max daily dropi | 13.71% | 15.49% | |
| Max wkly dropi | 22.99% | 26.25% |
| Category | XLF | KRE |
|---|---|---|
| Fund name | State Street Financial Select Sector SPDR ETF | State Street SPDR S&P Regional Banking ETF |
| Type | ETF | ETF |
| Expense ratioi | 0.08% | 0.35% |
| Total assets (AUM)i | $54.59B | $4.01B |
| Dividend yieldi | 1.40% | 2.17% |
- Broad financial sector coverage including banks, insurance, payment networks, and capital markets reduces single-subsector concentration
- 0.09% expense ratio is very low for a sector ETF, offering efficient diversified financial exposure
- Berkshire Hathaway and Visa/Mastercard positions provide less economically cyclical anchors alongside bank holdings
- Pure-play regional banking exposure gives maximum sensitivity to net interest margin expansion in rising rate environments
- Equal-weight methodology prevents concentration in a single regional bank, distributing exposure across 140 names
- Regional bank M&A activity benefits equal-weight ETFs as acquired companies receive buyout premiums
- Berkshire Hathaway's outsized weight can cause XLF to deviate from pure banking performance, frustrating investors seeking bank-specific exposure
- Payment network giants (Visa, Mastercard) are not interest-rate-sensitive in the same way banks are, diluting XLF's sensitivity to rate cycle trades
- During bank-specific stress (SVB crisis 2023), XLF underperformed a bank-only index but outperformed KRE due to diversification
- Regional banks are highly sensitive to credit quality deterioration — commercial real estate exposure was a major concern in 2023–2024
- Equal weighting means smaller, less financially sound regional banks have the same weight as stronger peers
- Silicon Valley Bank collapse (March 2023) triggered a contagion selloff in KRE that illustrated the binary risk in regional banking
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