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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?
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The SPDR S&P Insurance ETF (KIE - Free Report) made its debut on 11/08/2005, and is a smart beta exchange traded fund that provides 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $744.70 million, this makes it one of the average sized ETFs in the Financials ETFs. KIE is managed by State Street Global Advisors. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.30%.
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 Energy sector - about 0% of the portfolio. Industrials and Materials round out the top three.
Taking into account individual holdings, Allstate Corp (ALL - Free Report) accounts for about 2.81% of the fund's total assets, followed by Assurant Inc (AIZ - Free Report) and Willis Towers Watson Plc (WTW - Free Report) .
KIE's top 10 holdings account for about 24.86% of its total assets under management.
Performance and Risk
The ETF has gained about 12.03% so far this year and is up roughly 33.71% in the last one year (as of 03/14/2024). In the past 52-week period, it has traded between $37.44 and $50.66.
The ETF has a beta of 0.82 and standard deviation of 18.40% 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 a reasonable option for investors seeking to outperform the Financials ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $239.01 million in assets, iShares U.S. Insurance ETF has $617.65 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?
The SPDR S&P Insurance ETF (KIE - Free Report) made its debut on 11/08/2005, and is a smart beta exchange traded fund that provides 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $744.70 million, this makes it one of the average sized ETFs in the Financials ETFs. KIE is managed by State Street Global Advisors. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.30%.
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 Energy sector - about 0% of the portfolio. Industrials and Materials round out the top three.
Taking into account individual holdings, Allstate Corp (ALL - Free Report) accounts for about 2.81% of the fund's total assets, followed by Assurant Inc (AIZ - Free Report) and Willis Towers Watson Plc (WTW - Free Report) .
KIE's top 10 holdings account for about 24.86% of its total assets under management.
Performance and Risk
The ETF has gained about 12.03% so far this year and is up roughly 33.71% in the last one year (as of 03/14/2024). In the past 52-week period, it has traded between $37.44 and $50.66.
The ETF has a beta of 0.82 and standard deviation of 18.40% 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 a reasonable option for investors seeking to outperform the Financials ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $239.01 million in assets, iShares U.S. Insurance ETF has $617.65 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.