If you're interested in broad exposure to the Financials - Insurance segment of the equity market, look no further than the iShares U.S. Insurance ETF (
IAK Quick Quote IAK - Free Report) , a passively managed exchange traded fund launched on 05/01/2006.
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 3, placing it in top 19%.
The fund is sponsored by Blackrock. It has amassed assets over $231.18 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Insurance segment of the equity market. IAK seeks to match the performance of the Dow Jones U.S. Select Insurance Index before fees and expenses.
The Dow Jones U.S. Select Insurance Index includes companies providing a range of specialized financial services, including securities brokers & dealers, online brokers & securities or commodities exchanges.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.42%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.80%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that 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, Chubb Ltd (
CB Quick Quote CB - Free Report) accounts for about 11.46% of total assets, followed by Progressive Corp ( PGR Quick Quote PGR - Free Report) and American International Group Inc ( AIG Quick Quote AIG - Free Report) .
The top 10 holdings account for about 56.60% of total assets under management.
Performance and Risk
So far this year, IAK has added about 8.95%, and was up about 22.23% in the last one year (as of 04/06/2022). During this past 52-week period, the fund has traded between $74.76 and $92.52.
The ETF has a beta of 0.94 and standard deviation of 28.68% for the trailing three-year period, making it a medium risk choice in the space. With about 68 holdings, it effectively diversifies company-specific risk.
IShares U.S. 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, IAK is a good 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 SPDR S&P Insurance ETF ( KIE Quick Quote KIE - Free Report) tracks S&P Insurance Select Industry Index. Invesco KBW Property & Casualty Insurance ETF has $120.69 million in assets, SPDR S&P Insurance ETF has $455.96 million. KBWP has an expense ratio of 0.35% and KIE charges 0.35%. 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.