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Should You Invest in the SPDR S&P Insurance ETF (KIE)?

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If you're interested in broad exposure to the Financials - Insurance segment of the equity market, look no further than the SPDR S&P Insurance ETF (KIE - Free Report) , a passively managed exchange traded fund launched on 11/08/2005.

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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Financials - Insurance is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.

Index Details

The fund is sponsored by State Street Global Advisors. It has amassed assets over $962.80 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Insurance segment of the equity market. 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.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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 1.38%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 100% of the portfolio.

Looking at individual holdings, Oscar Health Inc Class A (OSCR - Free Report) accounts for about 2.86% of total assets, followed by Axis Capital Holdings Ltd (AXS - Free Report) and Lincoln National Corp (LNC - Free Report) .

The top 10 holdings account for about 24.48% of total assets under management.

Performance and Risk

So far this year, KIE has gained about 20.59%, and was up about 29.56% in the last one year (as of 08/19/2024). During this past 52-week period, the fund has traded between $41.43 and $54.33.

The ETF has a beta of 0.84 and standard deviation of 18.20% for the trailing three-year period, making it a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.

Alternatives

SPDR S&P Insurance ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, KIE is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that 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 $319 million in assets, iShares U.S. Insurance ETF has $616.96 million. KBWP has an expense ratio of 0.35% and IAK charges 0.40%.

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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