KBE: STATE STREET(R) SPDR(R) S&P(R) BANK ETF
ETF Education Report: STATE STREET(R) SPDR(R) S&P(R) BANK ETF (KBE)
What this ETF is trying to do
The KBE ETF is designed to track the performance of banks. Instead of buying just one bank, this fund holds many different companies in the banking sector. According to its top holdings, it includes companies like First Bancorp and Stock Yards Bancorp Inc. Because this is a partial list, it does not show every company in the fund, but it shows how the fund spreads its money across different banks.
What the numbers show
When looking at an ETF, it is important to understand two different types of returns: price return and total return.
• Price Return: This only measures how much the share price itself has changed.
• Total Return: This includes both the change in share price *and* any cash distributions (dividends) paid out to investors.
For KBE, the numbers show growth in both areas:
• Year-to-Date (YTD): The price return is approximately 5.31%, while the total return is approximately 7.08%.
• One Year: The price return was approximately 7.18%, and the total return was approximately 9.69%.
• Three Years: The price return was approximately 76.01%, and the total return was approximately 90.08%.
To visualize the price change, the current price is $63.91. The estimated price from roughly one year ago was approximately $59.63.
Income and distribution explanation
Some investors look for ETFs that pay them cash regularly. This is called a distribution yield. KBE has a distribution yield of approximately 2.30%. This means the fund has paid out cash relative to its share price. These distributions usually happen quarterly, and over the last 12 months, there were four payouts.
It is important to remember that a distribution yield is not the same as total return. While distributions provide cash, they are only one part of how an investor earns money from an ETF.
NAV erosion explanation
"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases significantly over time. Some investors worry that high payouts might cause this. However, for KBE, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.
Pros
• The fund has shown positive price returns and total returns over the one-year and three-year periods.
• It provides regular cash distributions (usually quarterly).
Cons
• As with any fund focused on one sector (banks), its performance is tied to how the banking industry performs.
• The provided list of holdings is only a partial list of the 107 total companies held.
Beginner takeaway
KBE is an ETF that focuses on the banking industry. It has provided both share-price growth and cash distributions to investors over the past few years. When looking at this or any other ETF, always check both the price return and the total return to get the full picture of how the investment has performed.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | FIRST BANCORP | FBNC | 1.89% |
| 2 | STOCK YARDS BANCORP INC | SYBT | 0.99% |
| 3 | EQUITABLE HOLDINGS INC | EQH | 0.98% |
| 4 | NBT BANCORP INC | NBTB | 0.98% |
| 5 | SIMMONS FIRST NATIONAL CORP CLASS A | SFNC | 0.98% |
| 6 | TRUSTMARK CORP | TRMK | 0.98% |
| 7 | CATHAY GENERAL BANCORP | CATY | 0.97% |
| 8 | CENTRAL BANCOMPANY INC CLASS A | CBC | 0.97% |
| 9 | COREBRIDGE FINANCIAL INC | CRBG | 0.97% |
| 10 | CVB FINANCIAL CORP | CVBF | 0.97% |