Which Banking ETF Is Better, State Street's KBE or iShares' U.S. Regional Bank-Focused IAT?
Compare diversification, risk, and cost structures as these two financial sector ETFs take different approaches to portfolio construction.
Overview
The State Street SPDR S&P Bank ETF (NYSEMKT:KBE) and iShares U.S. Regional Banks ETF (NYSEMKT:IAT) both target the financial sector, but KBE offers broader industry diversification and a lower expense ratio than the regional-focused IAT.
Investors looking for exposure to the financial sector often choose between broad banking indices and niche industry funds. This comparison examines how a diversified bank fund like the State Street SPDR S&P Bank ETF stacks up against a concentrated regional banking vehicle such as the iShares U.S. Regional Banks ETF, focusing on costs, risks, and portfolio construction for long-term holders. Understanding the differences in industry exposure is critical for managing sector-specific volatility in a portfolio.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.