XLF vs. KCE

Last updated Aug 6, 2026

XLF (State Street Financial Select Sector SPDR ETF) and KCE (SPDR S&P Capital Markets ETF) are both Financials Equities funds from State Street - XLF tracks the Financial Select Sector Index while KCE tracks the S&P Capital Markets Select Industry Index. Both are passively managed. Over the past 10 years, XLF returned 13.60%/yr vs 17.73%/yr for KCE. Their correlation of 0.86 means they have usually moved in the same direction. XLF charges 0.08%/yr vs 0.35%/yr for KCE.

Performance

XLF vs. KCE - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in State Street Financial Select Sector SPDR ETF (XLF) and SPDR S&P Capital Markets ETF (KCE). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XLF achieves a 6.82% return, which is significantly lower than KCE's 11.35% return. Over the past 10 years, XLF has underperformed KCE with an annualized return of 13.60%, while KCE has yielded a comparatively higher 17.73% annualized return.

XLF

• 1D: 0.21%
• 1M: 3.31%
• 6M: 8.42%
• YTD: 6.82%
• 1Y: 13.93%
• 3Y*: 20.33%
• 5Y*: 10.81%
• 10Y*: 13.60%
• ALL TIME*: 6.15%

KCE

• 1D: -0.20%
• 1M: 5.14%
• 6M: 10.60%
• YTD: 11.35%
• 1Y: 10.35%
• 3Y*: 24.68%
• 5Y*: 13.20%
• 10Y*: 17.73%
• ALL TIME*: 7.81%

*Multi-year figures are annualized to reflect compound growth (CAGR)

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
KCE SPDR S&P Capital Markets ETF	$2.37M	$2.19M	$2.42M
XLF State Street Financial Select Sector SPDR ETF	$1.89B	$1.89B	$1.91B

XLF vs. KCE - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLF State Street Financial Select Sector SPDR ETF	6.82%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%
KCE SPDR S&P Capital Markets ETF	11.35%	10.76%	37.51%	32.04%	-22.14%	40.05%	30.82%	27.13%	-15.63%	32.01%

Correlation

The correlation between XLF and KCE is 0.77, which is moderate. They have sometimes moved together and sometimes differently, sharing some price drivers without tracking each other closely.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.77
Correlation (3Y) Balances recent behavior with more history.	0.80
Correlation (5Y) Shows whether the relationship held over a longer period.	0.84
Correlation (10Y) Provides a long-term view across more market conditions.	0.84
Correlation (All Time) Calculated using the full available price history since Nov 15, 2005	0.86

The correlation between XLF and KCE has been stable across timeframes, ranging from 0.77 to 0.86 - a consistent structural relationship.

XLF vs. KCE - Sectors Allocation Comparison

Sectors	XLF	KCE
Financial Services	98.2%	97.2%
Technology	1.6%	2.8%
Industrials	0.2%	-
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

XLF vs. KCE — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

XLF

XLF Risk / Return Rank: 30
XLF Sharpe Ratio Rank: 34
XLF Sortino Ratio Rank: 32
XLF Omega Ratio Rank: 32
XLF Calmar Ratio Rank: 27
XLF Martin Ratio Rank: 27

KCE

KCE Risk / Return Rank: 20
KCE Sharpe Ratio Rank: 21
KCE Sortino Ratio Rank: 20
KCE Omega Ratio Rank: 20
KCE Calmar Ratio Rank: 20
KCE Martin Ratio Rank: 20

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

XLF vs. KCE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Financial Select Sector SPDR ETF (XLF) and SPDR S&P Capital Markets ETF (KCE). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	XLF	KCE	Difference
Sharpe ratio: Return per unit of total volatility	0.96	0.51	+0.45
Sortino ratio: Return per unit of downside risk	1.37	0.83	+0.54
Omega ratio: Gain probability vs. loss probability	1.17	1.10	+0.07
Calmar ratio: Return relative to maximum drawdown	0.95	0.60	+0.35
Martin ratio: Return relative to average drawdown	2.41	1.52	+0.90

XLF vs. KCE - Sharpe Ratio Comparison

The current XLF Sharpe Ratio is 0.96, which is higher than the KCE Sharpe Ratio of 0.51. The chart below compares the historical Sharpe Ratios of XLF and KCE, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

XLF vs. KCE - Drawdown Comparison

The maximum XLF drawdown since its inception was -82.69%, which is greater than KCE's maximum drawdown of -74.00%. Use the drawdown chart below to compare losses from any high point for XLF and KCE.

Drawdown Indicators

	XLF	KCE	Difference
Max Drawdown Largest peak-to-trough decline	-82.69%	-74.00%	-8.69%
Max Drawdown (1Y) Largest decline over 1 year	-14.79%	-17.44%	+2.65%
Max Drawdown (3Y) Largest decline over 3 years	-15.54%	-26.31%	+10.77%
Max Drawdown (5Y) Largest decline over 5 years	-25.81%	-34.45%	+8.64%
Max Drawdown (10Y) Largest decline over 10 years	-42.86%	-40.78%	-2.08%
Current Drawdown Current decline from peak	0.00%	-0.20%	+0.20%
Average Drawdown Average peak-to-trough decline	-19.91%	-22.64%	+2.73%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.78%	6.84%	-1.06%

Volatility

XLF vs. KCE - Volatility Comparison

The current volatility for State Street Financial Select Sector SPDR ETF (XLF) is 3.85%, while SPDR S&P Capital Markets ETF (KCE) has a volatility of 6.36%. This indicates that XLF experiences smaller price fluctuations and is considered to be less risky than KCE based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLF	KCE	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.85%	6.36%	-2.51%
Volatility (6M) Calculated over the trailing 6-month period	11.06%	15.60%	-4.54%
Volatility (1Y) Calculated over the trailing 1-year period	14.64%	20.59%	-5.95%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.44%	23.15%	-4.71%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.07%	22.87%	-0.80%

XLF vs. KCE - Expense Ratio Comparison

XLF has a 0.08% expense ratio, which is lower than KCE's 0.35% expense ratio.

Dividends

XLF vs. KCE - Dividend Comparison

XLF's dividend yield for the trailing twelve months is around 1.39%, less than KCE's 1.62% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
KCE SPDR S&P Capital Markets ETF	1.62%	1.63%	1.56%	1.82%	2.42%	1.53%	2.20%	2.32%	2.67%	1.95%	2.30%	2.43%
XLF State Street Financial Select Sector SPDR ETF	1.39%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%

Frequently Asked Questions

Can I hold both XLF and KCE in my portfolio?

XLF and KCE have a correlation of 0.77, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLF or KCE?

KCE has higher volatility (6.36%) compared to XLF (3.85%). In terms of maximum drawdown, XLF dropped -82.69% vs KCE's -74.00%.

Which ETF is better, XLF or KCE?

On 10-year performance, KCE leads with 17.73% vs 13.60% for XLF. On fees, XLF is cheaper at 0.08% per year. On volatility, XLF has been the lower-risk option at 3.85%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLF or KCE?

Over the 10-year period, KCE has performed better with a 17.73% return vs 13.60%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLF or KCE?

XLF is cheaper with a 0.08% expense ratio, compared with 0.35% for KCE.

Which ETF pays a higher dividend yield, XLF or KCE?

KCE has the higher dividend yield at 1.62%, compared with 1.39% for XLF.

What is the main difference between XLF and KCE?

XLF tracks Financial Select Sector Index, while KCE tracks S&P Capital Markets Select Industry Index. Their fees differ too: 0.08% for XLF and 0.35% for KCE.

Which has better risk-adjusted returns?

XLF currently has the higher Sharpe Ratio (0.96 vs 0.51), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.