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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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
The fund is managed by State Street Global Advisors. KIE has been able to amass assets over $715.29 million, making it one of the average sized ETFs in the Financials ETFs. 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things 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 1.42%.
Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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, Lincoln National Corp (LNC - Free Report) accounts for about 2.30% of the fund's total assets, followed by Allstate Corp (ALL - Free Report) and Everest Group Ltd (EG - Free Report) .
The top 10 holdings account for about 22% of total assets under management.
Performance and Risk
The ETF has added about 13.01% and is up roughly 29.92% so far this year and in the past one year (as of 05/14/2024), respectively. KIE has traded between $38.14 and $52.07 during this last 52-week period.
The fund has a beta of 0.83 and standard deviation of 18.39% for the trailing three-year period, which makes KIE a medium risk choice in this particular space. With about 51 holdings, it effectively diversifies company-specific risk.
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 $318.73 million in assets, iShares U.S. Insurance ETF has $647.36 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
The fund is managed by State Street Global Advisors. KIE has been able to amass assets over $715.29 million, making it one of the average sized ETFs in the Financials ETFs. 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things 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 1.42%.
Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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, Lincoln National Corp (LNC - Free Report) accounts for about 2.30% of the fund's total assets, followed by Allstate Corp (ALL - Free Report) and Everest Group Ltd (EG - Free Report) .
The top 10 holdings account for about 22% of total assets under management.
Performance and Risk
The ETF has added about 13.01% and is up roughly 29.92% so far this year and in the past one year (as of 05/14/2024), respectively. KIE has traded between $38.14 and $52.07 during this last 52-week period.
The fund has a beta of 0.83 and standard deviation of 18.39% for the trailing three-year period, which makes KIE a medium risk choice in this particular space. With about 51 holdings, it effectively diversifies company-specific risk.
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 $318.73 million in assets, iShares U.S. Insurance ETF has $647.36 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.