Should You Invest in the iShares US Insurance ETF (IAK)?

Llaunched on 05/01/2006, the iShares US Insurance ETF (IAK) is a passively managed mutual fund designed to provide exposure to the Financials – Insurance sector of the equity market.

Although they are an excellent vehicle for long-term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low cost, transparency, flexibility, and taxes.

Sector ETFs also offer investors the opportunity to gain access to a broad group of companies in sectors that offer low risk and diversified exposure. Financials – Insurance is one of 16 Zacks sectors included in the Zacks Industry Index. It is currently number 3, ranking it at the top 19%.

Index details

The fund is sponsored by Blackrock. It has accumulated assets of more than $330.80 million, making it one of the largest ETFs that attempt to match the Financials – Insurance sector of the equity market. IAK seeks to compare the performance of the Dow Jones US Select Insurance Index before fees and expenses.

The Dow Jones US Select Insurance Index includes companies that provide specialized financial services, including securities brokers & dealers, online brokers & securities or commodity exchanges.

Price

Price is a key factor in choosing the right ETF, and low-cost funds can outperform their more expensive counterparts if all other factors are equal.

This ETF’s annual fee is 0.42%, which makes it similar to most of its holdings.

The company paid a dividend of 1.95 %.

Sector Exposure and Top Holdings

Although ETFs offer a variety of exposures that reduce the risk of a single asset, it is still important to look at the financial situation before investing. Fortunately, most ETFs are highly transparent products that disclose their holdings on a daily basis.

This ETF is heavily weighted in the Financials sector – almost 100% of its portfolio.

Looking at the stock, Chubb Ltd (CB) accounts for about 11.90% of the total, followed by Progressive Corp (PGR) and Metlife Inc (MET).

The top 10 accounts for about 61.52% of all monitored products.

Actions and Risks

The ETF has lost approximately -1.49% so far this year and is up approximately 6.62% over the past one year (as of 08/08/2022). During the last 52 weeks, it traded between $77.61 and $92.57.

The ETF has a beta of 0.86 and a standard deviation of 29.32% for the three consecutive years, making it a medium-risk choice in the sector. With about 62 HOLDINGS, it effectively diversifies the company’s risk.

Other methods

iShares US Insurance ETF has a Zacks ETF Rank of 2 (Buy), which is based on asset returns, financial ratios, and leverage, among other factors. Because of this, IAK is an excellent option for investors who want exposure to the Financials ETFs sector of the market. There are some additional 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 SPDR S&P Insurance ETF (KIE) tracks the S&P Insurance Select Industry Index. Invesco KBW Property & Casualty Insurance ETF has $199.42 million, SPDR S&P Insurance ETF has $511.90 million. KBWP costs 0.35% and KIE costs 0.35%.

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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iShares US Insurance ETF (IAK): ETF Research Reports

Chubb Limited (CB): Free Stock Analysis Report

MetLife, Inc. (MET): Free Stock Analysis Report

The Progressive Corporation (PGR): Free Stock Analysis Report

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

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

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Zacks Investment Research

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