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

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

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 6, placing it in top 38%.

Index Details

The fund is sponsored by State Street Investment Management. It has amassed assets over $522.24 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.72%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Financials sector -- about 98.9% of the portfolio.

Looking at individual holdings, Wisdomtree Inc (WT) accounts for about 2.08% of total assets, followed by Robinhood Markets Inc A (HOOD) and Marketaxess Holdings Inc (MKTX).

The top 10 holdings account for about 18.6% of total assets under management.

Performance and Risk

Year-to-date, the State Street SPDR S&P Capital Markets ETF has added about 5.95% so far, and it's up approximately 4.91% over the last 12 months (as of 09/28/2026). KCE has traded between $132.62 and $171.843 in this past 52-week period.

The ETF has a beta of 1.22 and standard deviation of 21.36% 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

State Street SPDR S&P Capital Markets ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, KCE is a good option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) tracks Dow Jones U.S. Select Investment Services Index. The fund has $1.36 billion in assets. IAI has an expense ratio of 0.37%.

Bottom Line

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