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Is SPDR S&P Capital Markets ETF (KCE) 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 Capital Markets ETF (KCE - Free Report) is a smart beta exchange traded fund launched on 11/08/2005.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. KCE has been able to amass assets over $502.58 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
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.
The fund has a 12-month trailing dividend yield of 1.66%.
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.
For KCE, it has heaviest allocation in the Financials sector --about 100% of the portfolio.
Looking at individual holdings, Robinhood Markets Inc A (HOOD - Free Report) accounts for about 2.31% of total assets, followed by Cme Group Inc (CME - Free Report) and Intercontinental Exchange In (ICE - Free Report) .
KCE's top 10 holdings account for about 20.53% of its total assets under management.
Performance and Risk
The ETF has lost about -4.60% and is up about 22.97% so far this year and in the past one year (as of 03/27/2025), respectively. KCE has traded between $104.34 and $148.51 during this last 52-week period.
KCE has a beta of 1.22 and standard deviation of 22.27% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 64 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 $1.44 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?
Designed to provide broad exposure to the Financials ETFs category of the market, the SPDR S&P Capital Markets ETF (KCE - Free Report) is a smart beta exchange traded fund launched on 11/08/2005.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. KCE has been able to amass assets over $502.58 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
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.
The fund has a 12-month trailing dividend yield of 1.66%.
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.
For KCE, it has heaviest allocation in the Financials sector --about 100% of the portfolio.
Looking at individual holdings, Robinhood Markets Inc A (HOOD - Free Report) accounts for about 2.31% of total assets, followed by Cme Group Inc (CME - Free Report) and Intercontinental Exchange In (ICE - Free Report) .
KCE's top 10 holdings account for about 20.53% of its total assets under management.
Performance and Risk
The ETF has lost about -4.60% and is up about 22.97% so far this year and in the past one year (as of 03/27/2025), respectively. KCE has traded between $104.34 and $148.51 during this last 52-week period.
KCE has a beta of 1.22 and standard deviation of 22.27% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 64 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 $1.44 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.