The SPDR S&P Insurance ETF (
KIE Quick Quote KIE - Free Report) was launched on 11/08/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Insurance segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Insurance is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $507.66 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Insurance segment of the equity market. KIE seeks to match the performance of the S&P Insurance Select Industry Index before fees and expenses.
This Index is a modified equal-weighted index. It is currently comprised of leading companies active in the U.S. insurance industry that are listed on the NYSE, or another U.S. national securities exchange, or NASDAQ/NMS. Insurance Index components account for approximately three-quarters of the market capitalization of the entire U.S. public insurance company universe.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics 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 1.87%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Goosehead Insurance Inc. Class A (
GSHD Quick Quote GSHD - Free Report) accounts for about 2.39% of total assets, followed by Trupanion Inc. ( TRUP Quick Quote TRUP - Free Report) and Athene Holding Ltd. Class A .
The top 10 holdings account for about 21.05% of total assets under management.
Performance and Risk
The ETF has added about 26.95% and it's up approximately 43.32% so far this year and in the past one year (as of 11/03/2021), respectively. KIE has traded between $29.31 and $41.45 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 28.93% for the trailing three-year period, making it a medium risk choice in the space. With about 56 holdings, it effectively diversifies company-specific risk.
SPDR S&P Insurance ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, KIE is a reasonable option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco KBW Property & Casualty Insurance ETF (
KBWP Quick Quote KBWP - Free Report) tracks KBW Nasdaq Property & Casualty Index and the iShares U.S. Insurance ETF ( IAK Quick Quote IAK - Free Report) tracks Dow Jones U.S. Select Insurance Index. Invesco KBW Property & Casualty Insurance ETF has $88.19 million in assets, iShares U.S. Insurance ETF has $100.84 million. KBWP has an expense ratio of 0.35% and IAK charges 0.42%. Bottom Line
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Zacks ETF Center.