Should You Invest in the SPDR S&P Insurance ETF (KIE)?
Sector ETF report for KIE
Designed to provide broad exposure to the Financials - Insurance segment of the equity market, the SPDR S&P Insurance ETF (KIE) is a passively managed exchange traded fund launched on 11/08/2005.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $442.26 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.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.92%.
Sector Exposure and Top Holdings
ETFs offer a 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 Financials sector--about 100% of the portfolio.
Looking at individual holdings, Athene Holding Ltd. Class A (ATH) accounts for about 2.48% of total assets, followed by Trupanion Inc. (TRUP) and Brighthouse Financial Inc. (BHF).
The top 10 holdings account for about 22.07% of total assets under management.
Performance and Risk
So far this year, KIE has gained about 2.03%, and it's up approximately 22.20% in the last one year (as of 01/10/2022). During this past 52-week period, the fund has traded between $32.20 and $41.45.
The ETF has a beta of 0.98 and standard deviation of 28.80% for the trailing three-year period, making it a medium risk choice in the space. With about 56 holdings, it effectively diversifies company-specific risk.
SPDR S&P Insurance ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, KIE is a good option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco KBW Property & Casualty Insurance ETF (KBWP) tracks KBW Nasdaq Property & Casualty Index and the iShares U.S. Insurance ETF (IAK) tracks Dow Jones U.S. Select Insurance Index. Invesco KBW Property & Casualty Insurance ETF has $78.34 million in assets, iShares U.S. Insurance ETF has $100.22 million. KBWP has an expense ratio of 0.35% and IAK charges 0.42%.
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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SPDR S&P Insurance ETF (KIE): ETF Research Reports
Trupanion, Inc. (TRUP): Free Stock Analysis Report
iShares U.S. Insurance ETF (IAK): ETF Research Reports
Invesco KBW Property & Casualty Insurance ETF (KBWP): ETF Research Reports
Brighthouse Financial, Inc. (BHF): Free Stock Analysis Report
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