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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?
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The SPDR S&P Insurance ETF (KIE - Free Report) made its debut on 11/08/2005, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
KIE is managed by State Street Global Advisors, and this fund has amassed over $448.06 million, which makes it one of the average sized ETFs in the Financials ETFs. KIE, before fees and expenses, seeks to match the performance of the S&P Insurance Select Industry Index.
The S&P Insurance Select Industry Index represents the insurance segment of the S&P Total Market Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.95%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For KIE, it has heaviest allocation in the Financials sector --about 100% of the portfolio.
Looking at individual holdings, Trupanion Inc. (TRUP - Free Report) accounts for about 2.54% of total assets, followed by Arthur J. Gallagher & Co. (AJG - Free Report) and Kinsale Capital Group Inc. (KNSL - Free Report) .
Its top 10 holdings account for approximately 23.01% of KIE's total assets under management.
Performance and Risk
The ETF has lost about -6.91% and is down about -1.54% so far this year and in the past one year (as of 10/04/2022), respectively. KIE has traded between $35.58 and $42.60 during this last 52-week period.
The fund has a beta of 0.85 and standard deviation of 30.04% for the trailing three-year period, which makes KIE a medium risk choice in this particular space. With about 54 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Insurance ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) tracks KBW Nasdaq Property & Casualty Index and the iShares U.S. Insurance ETF (IAK - Free Report) tracks Dow Jones U.S. Select Insurance Index. Invesco KBW Property & Casualty Insurance ETF has $289.40 million in assets, iShares U.S. Insurance ETF has $316.88 million. KBWP has an expense ratio of 0.35% and IAK charges 0.39%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?
The SPDR S&P Insurance ETF (KIE - Free Report) made its debut on 11/08/2005, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
KIE is managed by State Street Global Advisors, and this fund has amassed over $448.06 million, which makes it one of the average sized ETFs in the Financials ETFs. KIE, before fees and expenses, seeks to match the performance of the S&P Insurance Select Industry Index.
The S&P Insurance Select Industry Index represents the insurance segment of the S&P Total Market Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.95%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For KIE, it has heaviest allocation in the Financials sector --about 100% of the portfolio.
Looking at individual holdings, Trupanion Inc. (TRUP - Free Report) accounts for about 2.54% of total assets, followed by Arthur J. Gallagher & Co. (AJG - Free Report) and Kinsale Capital Group Inc. (KNSL - Free Report) .
Its top 10 holdings account for approximately 23.01% of KIE's total assets under management.
Performance and Risk
The ETF has lost about -6.91% and is down about -1.54% so far this year and in the past one year (as of 10/04/2022), respectively. KIE has traded between $35.58 and $42.60 during this last 52-week period.
The fund has a beta of 0.85 and standard deviation of 30.04% for the trailing three-year period, which makes KIE a medium risk choice in this particular space. With about 54 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Insurance ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) tracks KBW Nasdaq Property & Casualty Index and the iShares U.S. Insurance ETF (IAK - Free Report) tracks Dow Jones U.S. Select Insurance Index. Invesco KBW Property & Casualty Insurance ETF has $289.40 million in assets, iShares U.S. Insurance ETF has $316.88 million. KBWP has an expense ratio of 0.35% and IAK charges 0.39%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.