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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?

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Launched on 11/08/2005, the SPDR S&P Insurance ETF (KIE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Financials ETFs category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

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.

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.

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 $999.79 million, this makes it one of the average sized ETFs in the Financials ETFs. KIE is managed by State Street Global Advisors. 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

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.

With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.

KIE's 12-month trailing dividend yield is 1.55%.

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.

This ETF has heaviest allocation in the Financials sector - about 100% of the portfolio.

Looking at individual holdings, Arthur J Gallagher + Co (AJG - Free Report) accounts for about 2.24% of total assets, followed by Globe Life Inc (GL - Free Report) and Palomar Holdings Inc (PLMR - Free Report) .

KIE's top 10 holdings account for about 21.3% of its total assets under management.

Performance and Risk

The ETF has gained about 7.58% so far this year and is up roughly 20.28% in the last one year (as of 03/26/2025). In the past 52-week period, it has traded between $47.72 and $62.03.

The ETF has a beta of 0.84 and standard deviation of 17.62% for the trailing three-year period, making it a medium risk choice in the space. With about 54 holdings, it effectively diversifies company-specific risk.

Alternatives

SPDR S&P Insurance ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.

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 $404.33 million in assets, iShares U.S. Insurance ETF has $794.11 million. KBWP has an expense ratio of 0.35% and IAK charges 0.39%.

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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