Launched on November 8, 2005, the State Street SPDR S&P Capital Markets ETF (KCE) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Brokers/ Capital markets segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Brokers/ Capital markets is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $452.63 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Brokers/ Capital markets segment of the equity market. KCE seeks to match the performance of the S&P Capital Markets Select Industry Index before fees and expenses.
The S&P Capital Markets Select Industry Index represents the capital markets segment of the S&P Total Market Index.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.69%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation in the Financials sector -- about 100% of the portfolio.
Looking at individual holdings, Stonex Group Inc (SNEX) accounts for about 1.97% of total assets, followed by Virtu Financial Inc Class A (VIRT) and Bgc Group Inc A (BGC).The top 10 holdings account for about 17.85% of total assets under management.
Performance and Risk
The ETF has gained about 1.97% and is up about 14.88% so far this year and in the past one year (as of 05/25/2026), respectively. KCE has traded between $132.62 and $161.48 during this last 52-week period.
The ETF has a beta of 1.24 and standard deviation of 20.94% for the trailing three-year period, making it a high risk choice in the space. With about 65 holdings, it effectively diversifies company-specific risk.
Alternatives
State Street SPDR S&P Capital Markets ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. KCE, then, is not the best option for investors seeking exposure to the Financials ETFs segment of the market. However, there are better ETFs in the space to consider.
iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) tracks Dow Jones U.S. Select Investment Services Index. The fund has $1.39 billion in assets. IAI has an expense ratio of 0.38%.
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 Capital Markets ETF (KCE): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).