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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?
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Designed to provide broad exposure to the Financials ETFs category of the market, the SPDR S&P Insurance ETF (KIE - Free Report) is a smart beta exchange traded fund launched on 11/08/2005.
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.
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
KIE is managed by State Street Global Advisors, and this fund has amassed over $436.65 million, which makes it one of the average sized ETFs in the Financials ETFs. Before fees and expenses, KIE 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
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.88%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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.
When you look at individual holdings, Renaissancere Holdings Ltd. (RNR - Free Report) accounts for about 2.78% of the fund's total assets, followed by Arch Capital Group Ltd. (ACGL - Free Report) and Everest Re Group Ltd. .
KIE's top 10 holdings account for about 24.83% of its total assets under management.
Performance and Risk
So far this year, KIE has lost about -1.86%, and is down about -1.96% in the last one year (as of 04/12/2023). During this past 52-week period, the fund has traded between $35.58 and $44.10.
KIE has a beta of 0.86 and standard deviation of 23.99% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 53 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 $379.43 million in assets, iShares U.S. Insurance ETF has $455.05 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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Is SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?
Designed to provide broad exposure to the Financials ETFs category of the market, the SPDR S&P Insurance ETF (KIE - Free Report) is a smart beta exchange traded fund launched on 11/08/2005.
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.
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
KIE is managed by State Street Global Advisors, and this fund has amassed over $436.65 million, which makes it one of the average sized ETFs in the Financials ETFs. Before fees and expenses, KIE 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
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.88%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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.
When you look at individual holdings, Renaissancere Holdings Ltd. (RNR - Free Report) accounts for about 2.78% of the fund's total assets, followed by Arch Capital Group Ltd. (ACGL - Free Report) and Everest Re Group Ltd. .
KIE's top 10 holdings account for about 24.83% of its total assets under management.
Performance and Risk
So far this year, KIE has lost about -1.86%, and is down about -1.96% in the last one year (as of 04/12/2023). During this past 52-week period, the fund has traded between $35.58 and $44.10.
KIE has a beta of 0.86 and standard deviation of 23.99% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 53 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 $379.43 million in assets, iShares U.S. Insurance ETF has $455.05 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.