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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?
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Designed to provide broad exposure to the Financials ETFs category of the market, the SPDR S&P Insurance ETF (KIE - Free Report) is a smart beta exchange traded fund launched on 11/08/2005.
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
KIE is managed by State Street Global Advisors, and this fund has amassed over $526.14 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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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.
This ETF has heaviest allocation in the Financials sector - about 100% of the portfolio.
When you look at individual holdings, Fidelity National Financial (FNF - Free Report) accounts for about 2.42% of the fund's total assets, followed by Metlife Inc (MET - Free Report) and American Equity Invt Life Hl .
Its top 10 holdings account for approximately 23.52% of KIE's total assets under management.
Performance and Risk
The ETF has gained about 5.57% and was up about 14.61% so far this year and in the past one year (as of 09/04/2023), respectively. KIE has traded between $35.58 and $44.10 during this last 52-week period.
The ETF has a beta of 0.86 and standard deviation of 20.51% for the trailing three-year period, making it 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 $155.11 million in assets, iShares U.S. Insurance ETF has $345.15 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?
Designed to provide broad exposure to the Financials ETFs category of the market, the SPDR S&P Insurance ETF (KIE - Free Report) is a smart beta exchange traded fund launched on 11/08/2005.
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
KIE is managed by State Street Global Advisors, and this fund has amassed over $526.14 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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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.
This ETF has heaviest allocation in the Financials sector - about 100% of the portfolio.
When you look at individual holdings, Fidelity National Financial (FNF - Free Report) accounts for about 2.42% of the fund's total assets, followed by Metlife Inc (MET - Free Report) and American Equity Invt Life Hl .
Its top 10 holdings account for approximately 23.52% of KIE's total assets under management.
Performance and Risk
The ETF has gained about 5.57% and was up about 14.61% so far this year and in the past one year (as of 09/04/2023), respectively. KIE has traded between $35.58 and $44.10 during this last 52-week period.
The ETF has a beta of 0.86 and standard deviation of 20.51% for the trailing three-year period, making it 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 $155.11 million in assets, iShares U.S. Insurance ETF has $345.15 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.