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Should You Invest in the SPDR S&P Insurance ETF (KIE)?

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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 SPDR S&P Insurance ETF (KIE - Free Report) , a passively managed exchange traded fund launched on 11/08/2005.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Financials - Insurance is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.

Index Details

The fund is sponsored by State Street Global Advisors. It has amassed assets over $593.67 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.

The S&P Insurance Select Industry Index represents the insurance segment of the S&P Total Market Index.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 1.66%.

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.

Looking at individual holdings, Fidelity National Financial (FNF - Free Report) accounts for about 2.42% of total assets, followed by Metlife Inc (MET - Free Report) and American Equity Invt Life Hl .

The top 10 holdings account for about 23.52% of total assets under management.

Performance and Risk

The ETF has gained about 5.37% so far this year and was up about 15.85% in the last one year (as of 10/11/2023). In that past 52-week period, it has traded between $37.21 and $44.10.

The ETF has a beta of 0.85 and standard deviation of 20.20% 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 sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. KIE, then, is not a suitable option for investors seeking exposure to the Financials ETFs segment of the market. Instead, there are better ETFs in the space to 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 $149.02 million in assets, iShares U.S. Insurance ETF has $346.16 million. KBWP has an expense ratio of 0.35% and IAK charges 0.40%.

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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