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.
KRE holds the edge across 3 of 5 key metrics in this comparison. KRE has delivered stronger 1-year price return (+26.87% vs +14.71% 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 | 27.3 | 25.1 |
| Latest closei | $59.20 | $74.13 |
| 1M returni | +9.87% | +5.31% |
| 3M returni | +2.43% | -3.60% |
| 6M returni | +15.00% | +6.05% |
| 1Y returni | +14.71% | +26.87% |
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 | $11.65K (+16.5%) started 2025-11-04 | $12.99K (+29.9%) started 2025-11-04 |
| 5Y ago | $17.62K (+76.2%) started 2021-11-05 | $13.19K (+31.9%) started 2021-11-05 |
| 10Y ago | $43.58K (+335.8%) started 2016-11-07 | $28.63K (+186.3%) started 2016-11-07 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLF | KRE |
|---|---|---|
| Expense ratioi | 0.08% | 0.35% |
| Total assets (AUM)i | $53.58B | $4.01B |
| Dividend yieldi | 1.46% | 2.24% |
| Trailing P/Ei | 15.99 | 12.35 |
| Betai | 0.87 | 0.90 |
| 52-week change | 14.71% | 26.87% |
| Metric | XLF | KRE |
|---|---|---|
| 1Y returni | +14.71% | +26.87% |
| 6M returni | +15.00% | +6.05% |
| 3M returni | +2.43% | -3.60% |
| 1M returni | +9.87% | +5.31% |
| 1Y Sharpe ratio | 0.70 | 1.05 |
| Betai | 0.87 | 0.90 |
| Dividend yieldi | 1.46% | 2.24% |
| 5Y CAGR | +10.03% | +2.66% |
Over the past year, XLF and KRE have moved moderately in the same direction (correlation of 0.68), 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 | +14.71% | +26.87% |
| CAGRi | +14.73% | +26.89% | |
| Volatilityi | 14.97% | 20.58% | |
| Sharpe ratioi | 0.70 | 1.05 | |
| Sortino ratioi | 1.01 | 1.55 | |
| Max drawdowni | 14.79% | 14.95% | |
| Current drawdowni | 0.00% | 4.33% | |
| Avg drawdowni | 4.74% | 4.43% | |
| Ulcer Indexi | 6.09% | 5.88% | |
| Max daily dropi | 3.35% | 5.14% | |
| Max wkly dropi | 4.81% | 7.13% | |
| 5Y | Growthi | +61.19% | +14.00% |
| CAGRi | +10.03% | +2.66% | |
| Volatilityi | 18.36% | 29.32% | |
| Sharpe ratioi | 0.37 | 0.08 | |
| Sortino ratioi | 0.52 | 0.12 | |
| Max drawdowni | 25.81% | 52.69% | |
| Current drawdowni | 0.00% | 4.33% | |
| Avg drawdowni | 7.90% | 20.45% | |
| Ulcer Indexi | 10.65% | 24.45% | |
| Max daily dropi | 7.32% | 12.31% | |
| Max wkly dropi | 12.19% | 25.83% | |
| 10Y | Growthi | +256.10% | +115.34% |
| CAGRi | +13.56% | +7.98% | |
| Volatilityi | 22.11% | 31.76% | |
| Sharpe ratioi | 0.48 | 0.26 | |
| Sortino ratioi | 0.68 | 0.37 | |
| Max drawdowni | 42.86% | 55.03% | |
| Current drawdowni | 0.00% | 4.33% | |
| Avg drawdowni | 7.65% | 16.86% | |
| Ulcer Indexi | 10.77% | 21.59% | |
| 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 | $53.58B | $4.01B |
| Dividend yieldi | 1.46% | 2.24% |
- 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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