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Should You Invest in the Invesco KBW Property & Casualty Insurance ETF (KBWP)?

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If you're interested in broad exposure to the Financials - Insurance segment of the equity market, look no further than the Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) , a passively managed exchange traded fund launched on 12/02/2010.

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 4, placing it in top 25%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $203.32 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Insurance segment of the equity market. KBWP seeks to match the performance of the KBW Nasdaq Property & Casualty Index before fees and expenses.

The KBW Nasdaq Property & Casualty Index is a modified market capitalization weighted index that reflects the performance of approximately 24 property and casualty insurance companies.

Costs

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 0.35%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 3.15%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Progressive Corp/the (PGR - Free Report) accounts for about 8.20% of total assets, followed by Allstate Corp/the (ALL - Free Report) and Travelers Cos Inc/the (TRV - Free Report) .

The top 10 holdings account for about 60.34% of total assets under management.

Performance and Risk

The ETF has lost about -2.17% and is up roughly 4.99% so far this year and in the past one year (as of 07/25/2022), respectively. KBWP has traded between $74.94 and $88.41 during this last 52-week period.

The ETF has a beta of 0.72 and standard deviation of 28.32% for the trailing three-year period, making it a medium risk choice in the space. With about 25 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco KBW Property & Casualty Insurance ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, KBWP is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

IShares U.S. Insurance ETF (IAK - Free Report) tracks Dow Jones U.S. Select Insurance Index and the SPDR S&P Insurance ETF (KIE - Free Report) tracks S&P Insurance Select Industry Index. IShares U.S. Insurance ETF has $318.25 million in assets, SPDR S&P Insurance ETF has $514.80 million. IAK has an expense ratio of 0.42% 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.

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