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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?
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Launched on 11/08/2005, the SPDR S&P Insurance ETF (KIE - Free Report) is a smart beta exchange traded fund offering 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
KIE is managed by State Street Global Advisors, and this fund has amassed over $515.03 million, which makes it one of the average sized ETFs in the Financials ETFs. Before fees and expenses, this particular fund 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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the cheaper products in the space.
KIE's 12-month trailing dividend yield is 1.79%.
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.
KIE's heaviest allocation is in the Financials sector, which is about 100% of the portfolio.
Taking into account individual holdings, Renaissancere Holdings Ltd. (RNR - Free Report) accounts for about 2.78% of the fund's total assets, followed by Arch Capital Group Ltd. (ACGL - Free Report) and Everest Re Group Ltd. .
The top 10 holdings account for about 24.83% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Insurance ETF return is roughly 5.69% so far, and is up about 6.60% over the last 12 months (as of 02/10/2023). KIE has traded between $35.58 and $43.98 in this past 52-week period.
KIE has a beta of 0.87 and standard deviation of 30.53% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 53 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 $382.70 million in assets, iShares U.S. Insurance ETF has $574.53 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?
Launched on 11/08/2005, the SPDR S&P Insurance ETF (KIE - Free Report) is a smart beta exchange traded fund offering 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
KIE is managed by State Street Global Advisors, and this fund has amassed over $515.03 million, which makes it one of the average sized ETFs in the Financials ETFs. Before fees and expenses, this particular fund 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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the cheaper products in the space.
KIE's 12-month trailing dividend yield is 1.79%.
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.
KIE's heaviest allocation is in the Financials sector, which is about 100% of the portfolio.
Taking into account individual holdings, Renaissancere Holdings Ltd. (RNR - Free Report) accounts for about 2.78% of the fund's total assets, followed by Arch Capital Group Ltd. (ACGL - Free Report) and Everest Re Group Ltd. .
The top 10 holdings account for about 24.83% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Insurance ETF return is roughly 5.69% so far, and is up about 6.60% over the last 12 months (as of 02/10/2023). KIE has traded between $35.58 and $43.98 in this past 52-week period.
KIE has a beta of 0.87 and standard deviation of 30.53% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 53 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 $382.70 million in assets, iShares U.S. Insurance ETF has $574.53 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.