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 (+30.09% vs +8.32% 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 score | 61.0 | 57.0 |
| Latest close | $53.57 | $71.72 |
| 1M return | +4.83% | +6.16% |
| 6M return | -1.09% | +7.87% |
| 1Y return | +8.32% | +30.09% |
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 | $11K (+10.0%) started 2025-06-18 | $13.34K (+33.4%) started 2025-06-18 |
| 5Y ago | $18.16K (+81.6%) started 2021-06-18 | $14.92K (+49.2%) started 2021-06-18 |
| 10Y ago | $42.44K (+324.4%) started 2016-06-20 | $30.77K (+207.7%) started 2016-06-20 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLF | KRE |
|---|---|---|
| Expense ratio | 0.08% | 0.35% |
| Total assets (AUM) | $49.42B | $3.8B |
| Dividend yield | 1.54% | 2.26% |
| Trailing P/E | 16.90 | 12.81 |
| Beta | 0.88 | 0.88 |
| 52-week change | 8.32% | 30.09% |
| Metric | XLF | KRE |
|---|---|---|
| 1Y return | +8.32% | +30.09% |
| 6M return | -1.09% | +7.87% |
| 1M return | +4.83% | +6.16% |
| 1Y Sharpe ratio | 0.31 | 1.06 |
| Beta | 0.88 | 0.88 |
| Dividend yield | 1.54% | 2.26% |
| 5Y CAGR | +10.66% | +5.24% |
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 | Growth | +8.32% | +30.09% |
| CAGR | +8.32% | +30.11% | |
| Sharpe ratio | 0.31 | 1.06 | |
| Max drawdown | 14.79% | 14.95% | |
| Max daily drop | 3.35% | 6.20% | |
| Max wkly drop | 4.81% | 7.64% | |
| 5Y | Growth | +65.90% | +29.09% |
| CAGR | +10.66% | +5.24% | |
| Sharpe ratio | 0.40 | 0.17 | |
| Max drawdown | 25.81% | 52.69% | |
| Max daily drop | 7.32% | 12.31% | |
| Max wkly drop | 12.19% | 25.83% | |
| 10Y | Growth | +247.74% | +133.46% |
| CAGR | +13.28% | +8.85% | |
| Sharpe ratio | 0.47 | 0.29 | |
| Max drawdown | 42.86% | 55.03% | |
| Max daily drop | 13.71% | 15.49% | |
| Max wkly drop | 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 ratio | 0.08% | 0.35% |
| Total assets (AUM) | $49.42B | $3.8B |
| Dividend yield | 1.54% | 2.26% |
- →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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