KBE vs KRE: Which ETF Is Better in 2026?
A metric-by-metric comparison of State Street SPDR S&P Bank ETF (KBE) and State Street SPDR S&P Regional Banking ETF (KRE) — both Financial funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
KBE and KRE are close to the same fund wearing different labels. Both sit in the Financial category and their daily returns move almost identically, so this is not really a question of which fund is better — it is a question of which one is cheaper to own and easier to trade in your account. Everything below is about finding the small, structural edges, because the investment exposure is a wash.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — KRE scores higher: 58.8 (Grade C) versus 57.8 for KBE. That doesn't make KBE a bad fund; it means KRE currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| KBE | KRE | |
|---|---|---|
| Category | Financial | Financial |
| Expense ratio | 0.35% | 0.35% |
| Fund size (AUM) | $1.5B | $4.7B |
| Dividend yield | 2.15% | 2.14% |
| 1-year return | +20.90% | +22.43% |
| 3-year return | +79.31% | +69.18% |
| Volatility | 21.34% | 22.97% |
| Max drawdown | -25.98% | -28.20% |
| Sharpe ratio | 0.75 | 0.76 |
| ETFValuer score | 57.8 | 58.8 |
| Grade | C | C |
| Overall rank | #280 | #265 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
On cost, the two are essentially tied — KBE charges 0.35% a year versus KRE's 0.35%. A difference this small (about $0.00 a year on a $10,000 position) isn't a reason to choose one fund over the other. That matters more than usual here: when two funds track the same exposure this closely, fee is normally the whole argument — and with the fees this close, there is no argument left. Liquidity and whichever one trades commission-free in your account become the tiebreaker.
What KBE's Fees Cost You
KBE charges an expense ratio of 0.35% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, KBE returned +79.31% versus +69.18% for KRE — a gap of about 10.1 percentage points. On risk, KBE has held up better historically, with a shallower max drawdown (-25.98% vs. -28.20%). KRE currently has the better risk-adjusted return (Sharpe ratio of 0.76 vs. 0.75), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), KBE and KRE show a near-perfect correlation of 0.993 — functionally interchangeable. At this level the two funds are, for practical purposes, the same investment. Owning both adds no diversification whatsoever — the decision should come down entirely to cost, spread and which one your broker handles better.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.993 | Near-perfect — functionally interchangeable |
| R-squared | 98.7% | 98.7% of KBE's daily moves are explained by KRE's |
| Tracking error (annualised) | 4.06% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | KBE +23.11% · KRE +20.98% | KBE ahead by 2.13 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, KBE finished as much as +9.5 points ahead of KRE at the best extreme and -4.9 points at the worst — a 14.4-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
KBE and KRE hold 2 of the same companies among their top 10 positions. Those shared names make up 2.1% of KBE and 3.1% of KRE. That's modest duplication — the funds are mostly distinct at the top, so holding both can still add diversification.
| Shared Holding | KBE Weight | KRE Weight |
|---|---|---|
| Flagstar Bank NA | 1.06% | 1.55% |
| Zions Bancorp NA | 1.04% | 1.53% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean KBE if…
- You weight recent results heavily — it returned 79.3% over 3 years against 69.2%
Lean KRE if…
- You want the deeper, more liquid market ($5B in assets vs $1B)
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is KBE or KRE better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — KRE scores higher: 58.8 (Grade C) versus 57.8 for KBE. That doesn't make KBE a bad fund; it means KRE currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, KBE or KRE?
KRE currently has the lower expense ratio (0.35% vs. 0.35%).
Can I hold both KBE and KRE?
You can, but there's little point. KBE and KRE have a daily return correlation of 0.99 over the past 3.0 years, meaning they move almost in lockstep. Holding both roughly doubles a single bet rather than spreading it — pick whichever wins on cost and liquidity and put the money in one place.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.