Is the SPDR S&P Insurance ETF (KIE) a Strong ETF Right Now?

The SPDR S&P Insurance ETF (KIE) was launched on 11/08/2005, and is a smart beta exchange-traded fund that provides exposure to the group of Financials ETFs in the market.

What are Smart Beta ETFs?

For a long time, the ETF industry has been flooded with stock market products, designed to represent the broad market or a specific market segment.

Market-weighted indexes provide an inexpensive, simple, and transparent way to replicate market returns, and are a great option for investors who believe the market is moving well.

On the other hand, investors who believe that it is possible to beat the market by choosing the right stocks choose to invest in another type of fund that follows an unweighted strategy – known as smart beta.

These indexes attempt to select stocks that have a better chance of returning risk, based on certain characteristics or a combination of such characteristics.

Although the site offers many options for investors – consider one of the simple methods such as equal weights and more complex ones such as initial and fixed / quick weights – not all of them were able to provide the first results.

Fund Sponsor & Index

Because the fund has accumulated more than $519.43 million, this makes it one of the largest ETFs in Financials ETFs. KIE is managed by State Street Global Advisors. The fund, before paying fees and expenses, aims to match the performance of the S&P Insurance Select Industry Index.

The S&P Insurance Select Industry Index represents the insurance sector of the S&P Total Market Index.

Cost & Other Fees

Investors should also pay attention to the ETF’s liquidity. A low-cost product will produce better results than a high-cost product, assuming all other metrics remain the same.

Annual operating expenses are 0.35% for KIE, making it one of the cheapest properties in the area.

The company paid a dividend of 1.96 %.

Sector Exposure and Top Holdings

Most ETFs are highly transparent, and disclose their holdings on a daily basis. ETFs also provide diversified exposure, which reduces the risk of individual stocks, although it is still important for investors to research the investment’s position.

KIE’s heaviest share is in the Financials sector, which is almost 100% of the portfolio.

Considering the individual’s financial situation, Trupanion Inc. ( TRUP ) accounts for about 2.34% of the fund’s total assets, followed by Arthur J. Gallagher & Co. (AJG) and Globe Life Inc. (GL).

The top 10 KIE companies account for approximately 21.66% of all assets under management.

Actions and Risks

The ETF has lost about -5.83% so far this year and is up about 0.75% over the past one year (as of 08/02/2022). Over the past 52-weeks, they have traded between $35.92 and $42.60.

KIE has a beta of 0.88 and a standard deviation of 29.94% for the three consecutive years, which makes the fund a medium risk choice in the area. With about 54 properties, it clearly differentiates the risk of the industry.

Other methods

The SPDR S&P Insurance ETF is an excellent option for investors looking to outperform the Financials ETFs sector in the market. There are other ETFs in the area that investors may also consider.

The Invesco KBW Property & Casualty Insurance ETF (KBWP) tracks the KBW Nasdaq Property & Casualty Index and the iShares US Insurance ETF (IAK) tracks the Dow Jones US Select Insurance Index. Invesco KBW Property & Casualty Insurance ETF has $200.68 million, iShares US Insurance ETF has $328.86 million. KBWP has an interest rate of 0.35% and IAK costs 0.42%.

Investors looking for low-cost and low-cost options should consider traditional ETFs that aim to match the returns of Financials ETFs.

Down Under

To learn more about these and other ETFs, open the screens that are relevant to your investment and read the latest news in the ETF Investment Universe, please visit Zacks ETF Center.

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SPDR S&P Insurance ETF (KIE): ETF Research Reports

Arthur J. Gallagher & Co. (AJG): Free Stock Analysis Report

Trupanion, Inc. (TRUP): Free Stock Analysis Report

iShares US Insurance ETF (IAK): ETF Research Reports

Invesco KBW Property & Casualty Insurance ETF (KBWP) stock price history

Globe Life Inc. (GL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.