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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?
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A smart beta exchange traded fund, the SPDR S&P Insurance ETF (KIE - Free Report) debuted on 11/08/2005, and offers broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by State Street Global Advisors, KIE has amassed assets over $692.64 million, making it one of the average sized ETFs in the Financials ETFs. KIE, before fees and expenses, 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
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.43%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 100% of the portfolio, the fund has heaviest allocation to the Financials sector.
Looking at individual holdings, Allstate Corp (ALL - Free Report) accounts for about 2.81% of total assets, followed by Assurant Inc (AIZ - Free Report) and Willis Towers Watson Plc (WTW - Free Report) .
The top 10 holdings account for about 24.86% of total assets under management.
Performance and Risk
The ETF return is roughly 1.44% so far this year and is up about 10.12% in the last one year (as of 01/09/2024). In the past 52-week period, it has traded between $37.44 and $46.09.
The fund has a beta of 0.82 and standard deviation of 18.88% for the trailing three-year period, which makes KIE a medium risk choice in this particular 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 $199.45 million in assets, iShares U.S. Insurance ETF has $473.84 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?
A smart beta exchange traded fund, the SPDR S&P Insurance ETF (KIE - Free Report) debuted on 11/08/2005, and offers broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by State Street Global Advisors, KIE has amassed assets over $692.64 million, making it one of the average sized ETFs in the Financials ETFs. KIE, before fees and expenses, 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
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.43%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 100% of the portfolio, the fund has heaviest allocation to the Financials sector.
Looking at individual holdings, Allstate Corp (ALL - Free Report) accounts for about 2.81% of total assets, followed by Assurant Inc (AIZ - Free Report) and Willis Towers Watson Plc (WTW - Free Report) .
The top 10 holdings account for about 24.86% of total assets under management.
Performance and Risk
The ETF return is roughly 1.44% so far this year and is up about 10.12% in the last one year (as of 01/09/2024). In the past 52-week period, it has traded between $37.44 and $46.09.
The fund has a beta of 0.82 and standard deviation of 18.88% for the trailing three-year period, which makes KIE a medium risk choice in this particular 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 $199.45 million in assets, iShares U.S. Insurance ETF has $473.84 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.