Designed to provide broad exposure to the Financials - Brokers/ Capital markets segment of the equity market, the SPDR S&P Capital Markets ETF (KCE Quick QuoteKCE - Free Report) is a passively managed exchange traded fund launched on November 8, 2005.

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.

Sector ETFs are also funds of convenience, offering many ways 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 1, placing it in top 6%.

Index Details

The fund is sponsored by State Street Investment Management. It has amassed assets over $609.67 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

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 least expensive products in the space.

It has a 12-month trailing dividend yield of 1.45%.

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, Robinhood Markets Inc A (HOOD) accounts for about 2.25% of total assets, followed by Invesco Ltd (IVZ) and Carlyle Group Inc/the (CG).

The top 10 holdings account for about 19.61% of total assets under management.

Performance and Risk

Year-to-date, the SPDR S&P Capital Markets ETF return is roughly 14.44% so far, and is up roughly 33.88% over the last 12 months (as of 09/15/2025). KCE has traded between $108.52 and $157.83 in this past 52-week period.

The ETF has a beta of 1.27 and standard deviation of 22.31% for the trailing three-year period, making it a high risk choice in the space. With about 63 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 a great choice 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) tracks Dow Jones U.S. Select Investment Services Index. The fund has $1.52 billion in assets. IAI has an expense ratio of 0.38%.

Bottom Line

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