The State Street SPDR S&P Insurance ETF (KIE) made its debut on 11/08/2005, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
KIE is managed by State Street Investment Management, and this fund has amassed over $491.15 million, which makes it one of the average sized ETFs in the Financials ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Insurance Select Industry Index.
The S&P Insurance Select Industry Index represents the insurance segment of the S&P Total Market Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.62%.
Sector Exposure and Top Holdings
ETFs offer 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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Financials sector.
Taking into account individual holdings, Baldwin Insurance Group Inc/ (BWIN) accounts for about 2.12% of the fund's total assets, followed by Arthur J Gallagher + Co (AJG) and Palomar Holdings Inc (PLMR).
The top 10 holdings account for about 19.74% of total assets under management.
Performance and Risk
So far this year, KIE has lost about -2.81%, and was up about 3.04% in the last one year (as of 02/04/2026). During this past 52-week period, the fund has traded between $53.63 and $61.12.
The fund has a beta of 0.68 and standard deviation of 17.01% for the trailing three-year period, which makes KIE a medium risk choice in this particular space. With about 56 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR S&P Insurance ETF is a reasonable option for investors seeking to outperform the Financials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $285.27 million in assets, iShares U.S. Insurance ETF has $426.46 million. KBWP has an expense ratio of 0.35% and IAK changes 0.38%.
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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State Street SPDR S&P Insurance ETF (KIE): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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