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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by State Street Investment Management, KIE has amassed assets over $701.41 million, making it one of the larger 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
KIE's 12-month trailing dividend yield is 1.55%.
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.
When you look at individual holdings, Baldwin Insurance Group Inc/ (BWIN) accounts for about 2.33% of the fund's total assets, followed by Lemonade Inc (LMND) and Ryan Specialty Holdings Inc (RYAN).
Its top 10 holdings account for approximately 20.46% of KIE's total assets under management.
Performance and Risk
So far this year, KIE has added roughly 5.92%, and is up roughly 10.95% in the last one year (as of 08/18/2026). During this past 52-week period, the fund has traded between $53.55 and $66.45.
KIE has a beta of 0.60 and standard deviation of 16.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 55 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR S&P Insurance ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $281.42 million in assets, iShares U.S. Insurance ETF has $568.92 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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