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Should You Invest in the SPDR S&P Capital Markets ETF (KCE)?
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The SPDR S&P Capital Markets ETF (KCE - Free Report) was launched on 11/08/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Brokers/ Capital markets segment of the equity market.
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 - Brokers/ Capital markets 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 $311.33 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Brokers/ Capital markets segment of the equity market. KCE seeks to match the performance of the S&P Capital Markets Select Industry Index before fees and expenses.
The S&P Capital Markets Select Industry Index represents the capital markets segment of the S&P Total Market Index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 2.12%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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, Blue Owl Capital Inc (OWL - Free Report) accounts for about 1.97% of total assets, followed by Cme Group Inc (CME - Free Report) and Cboe Global Markets Inc (CBOE - Free Report) .
The top 10 holdings account for about 18.80% of total assets under management.
Performance and Risk
The ETF has added roughly 4.91% so far this year and is up about 11.68% in the last one year (as of 10/24/2023). In that past 52-week period, it has traded between $76.39 and $92.85.
The ETF has a beta of 1.18 and standard deviation of 23.22% for the trailing three-year period, making it a high risk choice in the space. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Capital Markets ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. KCE, then, is not the best option for investors seeking exposure to the Financials ETFs segment of the market. However, there are better ETFs in the space to consider.
IShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI - Free Report) tracks Dow Jones U.S. Select Investment Services Index. The fund has $351.88 million in assets. IAI has an expense ratio of 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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Should You Invest in the SPDR S&P Capital Markets ETF (KCE)?
The SPDR S&P Capital Markets ETF (KCE - Free Report) was launched on 11/08/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Brokers/ Capital markets segment of the equity market.
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 - Brokers/ Capital markets 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 $311.33 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Brokers/ Capital markets segment of the equity market. KCE seeks to match the performance of the S&P Capital Markets Select Industry Index before fees and expenses.
The S&P Capital Markets Select Industry Index represents the capital markets segment of the S&P Total Market Index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 2.12%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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, Blue Owl Capital Inc (OWL - Free Report) accounts for about 1.97% of total assets, followed by Cme Group Inc (CME - Free Report) and Cboe Global Markets Inc (CBOE - Free Report) .
The top 10 holdings account for about 18.80% of total assets under management.
Performance and Risk
The ETF has added roughly 4.91% so far this year and is up about 11.68% in the last one year (as of 10/24/2023). In that past 52-week period, it has traded between $76.39 and $92.85.
The ETF has a beta of 1.18 and standard deviation of 23.22% for the trailing three-year period, making it a high risk choice in the space. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Capital Markets ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. KCE, then, is not the best option for investors seeking exposure to the Financials ETFs segment of the market. However, there are better ETFs in the space to consider.
IShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI - Free Report) tracks Dow Jones U.S. Select Investment Services Index. The fund has $351.88 million in assets. IAI has an expense ratio of 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.