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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) was launched on 11/08/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 $610.81 million, which makes it one of the average sized ETFs in the Financials ETFs. KIE seeks to match the performance of the S&P Insurance Select Industry Index before fees and expenses.
The S&P Insurance Select Industry Index represents the insurance segment of the S&P Total Market Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for KIE are 0.35%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.64%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For KIE, it has heaviest allocation in the Financials sector --about 100% of the portfolio.
When you look at individual holdings, Progressive Corp (PGR - Free Report) accounts for about 2.55% of the fund's total assets, followed by Allstate Corp (ALL - Free Report) and Erie Indemnity Company Cl A (ERIE - Free Report) .
The top 10 holdings account for about 24.4% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Insurance ETF has added roughly 6.86% so far, and was up about 7.89% over the last 12 months (as of 11/07/2023). KIE has traded between $37.44 and $44.30 in this past 52-week period.
KIE has a beta of 0.84 and standard deviation of 19.97% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Insurance ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
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 $173.08 million in assets, iShares U.S. Insurance ETF has $381.48 million. KBWP has an expense ratio of 0.35% and IAK charges 0.40%.
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) was launched on 11/08/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 $610.81 million, which makes it one of the average sized ETFs in the Financials ETFs. KIE seeks to match the performance of the S&P Insurance Select Industry Index before fees and expenses.
The S&P Insurance Select Industry Index represents the insurance segment of the S&P Total Market Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for KIE are 0.35%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.64%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For KIE, it has heaviest allocation in the Financials sector --about 100% of the portfolio.
When you look at individual holdings, Progressive Corp (PGR - Free Report) accounts for about 2.55% of the fund's total assets, followed by Allstate Corp (ALL - Free Report) and Erie Indemnity Company Cl A (ERIE - Free Report) .
The top 10 holdings account for about 24.4% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Insurance ETF has added roughly 6.86% so far, and was up about 7.89% over the last 12 months (as of 11/07/2023). KIE has traded between $37.44 and $44.30 in this past 52-week period.
KIE has a beta of 0.84 and standard deviation of 19.97% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Insurance ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
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 $173.08 million in assets, iShares U.S. Insurance ETF has $381.48 million. KBWP has an expense ratio of 0.35% and IAK charges 0.40%.
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.