Is SPDR S&P Insurance ETF (KIE) a strong ETF right now?

A smart beta exchange traded fund, the SPDR S&P Insurance ETF (KIE - Free Report) debuted on 11/08/2005, and offers 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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

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 and index

The fund is managed by State Street Investment Management, and has been able to amass over $838.81 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 and other expenses

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.

KIE's 12-month trailing dividend yield is 1.56%.

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.

For KIE, it has heaviest allocation in the Financials sector --about 100% of the portfolio.

Looking at individual holdings, Oscar Health Inc Class A (OSCR) accounts for about 2.53% of total assets, followed by Lincoln National Corp (LNC) and Genworth Financial Inc (GNW).

KIE's top 10 holdings account for about 22.41% of its total assets under management.

Performance and risk

So far this year, KIE return is roughly 6.07%, and was up about 6.16% in the last one year (as of 10/01/2025). During this past 52-week period, the fund has traded between $53.63 and $62.03.

The fund has a beta of 0.76 and standard deviation of 17.69% for the trailing three-year period, which makes KIE a medium risk choice in this particular space. With about 54 holdings, it effectively diversifies company-specific risk .

Alternatives

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 $443.98 million in assets, iShares U.S. Insurance ETF has $703.32 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.

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