KRE vs XLF: Regional Bank ETF vs Broad Financials, Concentrated vs Diversified
KRE equal-weights regional banks: First Horizon, Cullen Frost, SVB (before its collapse). XLF cap-weights all financials, and JPMorgan dominates. The 2023 banking crisis showed how different these two funds really are.
KRE (SPDR S&P Regional Banking ETF) and XLF (Financial Select Sector SPDR) are both US financial sector ETFs but with dramatically different risk profiles. KRE holds ~150 regional banks using equal weighting, so no single bank exceeds 2-3%, meaning smaller community and regional lenders have as much influence as larger regionals. XLF holds 74 S&P 500 financials cap-weighted, with JPMorgan, Berkshire Hathaway, and Visa alone making up 35%+ of the fund. The 2023 banking crisis (SVB, Signature Bank, First Republic failures) hit KRE brutally, falling 40%+ while XLF dropped only 15% because XLF has negligible exposure to smaller banks. KRE costs 0.35%; XLF costs 0.09%. KRE is for investors who have a specific thesis on regional banking recovery: higher risk, higher reward in a regional bank bull market. XLF is the broad financials choice.
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
📋 KRE vs XLF — Key Facts Side by Side
| Metric | KRE | XLF |
|---|---|---|
| Fund Name | State Street SPDR S&P Regional Banking ETF | State Street Financial Select Sector SPDR ETF |
| Issuer | State Street | State Street |
| Tracks Index | S&P Regional Banks Select Industry | Financial Select Sector Index |
| Expense Ratio | 0.35% | 0.09% ✓ |
| Cost per $10K/yr | $35.00 | $9.00 |
| AUM | $4.7B | $51.4B |
| Holdings | 150 | 74 |
| Inception | 2006 | 1998 |
| 1-Year Return | +17.96% | +6.01% |
| 3-Year Return | +25.09% | +20.12% |
| 5-Year Return | +5.72% | +10.53% |
| Dividend Yield | 2.14% | 1.51% |
| Holdings Overlap | See holdings overlap → | |
| Avg Bid-Ask Spread | 0.02% | 0.00% |
Expense ratio, AUM, and returns updated Jul 14, 2026 from ETF BFF database. Returns are annualised. Not investment advice.
📊 KRE vs XLF — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Which Fund Fits Which Investor?
- want broader diversification (150 holdings vs 74)
- want the lowest fees: saves ~$26/yr per $10K vs KRE
💰 What the Fee Difference Actually Costs
Adjust the numbers for your situation. This models each fund's expense ratio compounding against your balance over time.
Assumes a constant annual return reinvested, with each fund's expense ratio deducted yearly. Illustrative only; actual returns vary. Past performance does not guarantee future results.
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❓ KRE vs XLF — Frequently Asked Questions
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