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Is SPDR S&P Capital Markets ETF (KCE) a Strong ETF Right Now?
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The SPDR S&P Capital Markets ETF (KCE - Free Report) was launched on 11/08/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. KCE has been able to amass assets over $457.73 million, making it one of the average sized ETFs in the Financials ETFs. KCE, before fees and expenses, seeks to match the performance of the S&P Capital Markets Select Industry Index.
The S&P Capital Markets Select Industry Index represents the capital markets 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.
Operating expenses on an annual basis are 0.35% for KCE, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.73%.
Sector Exposure and 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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Financials sector.
Looking at individual holdings, Robinhood Markets Inc A (HOOD - Free Report) accounts for about 2.14% of total assets, followed by Stepstone Group Inc Class A (STEP - Free Report) and Victory Capital Holding A (VCTR - Free Report) .
Its top 10 holdings account for approximately 19.46% of KCE's total assets under management.
Performance and Risk
So far this year, KCE has gained about 17.66%, and is up about 35.60% in the last one year (as of 07/17/2024). During this past 52-week period, the fund has traded between $80.30 and $118.92.
KCE has a beta of 1.20 and standard deviation of 22.53% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 65 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Capital Markets ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI - Free Report) tracks Dow Jones U.S. Select Investment Services Index. The fund has $1.17 billion in assets. IAI has an expense ratio of 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 Capital Markets ETF (KCE) a Strong ETF Right Now?
The SPDR S&P Capital Markets ETF (KCE - Free Report) was launched on 11/08/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. KCE has been able to amass assets over $457.73 million, making it one of the average sized ETFs in the Financials ETFs. KCE, before fees and expenses, seeks to match the performance of the S&P Capital Markets Select Industry Index.
The S&P Capital Markets Select Industry Index represents the capital markets 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.
Operating expenses on an annual basis are 0.35% for KCE, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.73%.
Sector Exposure and 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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Financials sector.
Looking at individual holdings, Robinhood Markets Inc A (HOOD - Free Report) accounts for about 2.14% of total assets, followed by Stepstone Group Inc Class A (STEP - Free Report) and Victory Capital Holding A (VCTR - Free Report) .
Its top 10 holdings account for approximately 19.46% of KCE's total assets under management.
Performance and Risk
So far this year, KCE has gained about 17.66%, and is up about 35.60% in the last one year (as of 07/17/2024). During this past 52-week period, the fund has traded between $80.30 and $118.92.
KCE has a beta of 1.20 and standard deviation of 22.53% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 65 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Capital Markets ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI - Free Report) tracks Dow Jones U.S. Select Investment Services Index. The fund has $1.17 billion in assets. IAI has an expense ratio of 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.