Designed to provide broad exposure to the Financials ETFs category of the market, the State Street SPDR S&P Insurance ETF (KIE) is a smart beta exchange traded fund launched on 11/08/2005.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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
Because the fund has amassed over $483.89 million, this makes it one of the average sized ETFs in the Financials ETFs. KIE is managed by State Street Investment Management. Before fees and expenses, this particular fund 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining 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.
KIE's 12-month trailing dividend yield is 1.60%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 100% of the portfolio.
When you look at individual holdings, Siriuspoint Ltd (SPNT) accounts for about 2.02% of the fund's total assets, followed by Baldwin Insurance Group Inc/ (BWIN) and Oscar Health Inc Class A (OSCR).
The top 10 holdings account for about 19.44% of total assets under management.
Performance and Risk
The ETF has lost about -3% and it's up approximately 1.82% so far this year and in the past one year (as of 06/12/2026), respectively. KIE has traded between $53.55 and $61.03 during this last 52-week period.
KIE has a beta of 0.62 and standard deviation of 16.47% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 56 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 $253.94 million in assets, iShares U.S. Insurance ETF has $371.75 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
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State Street SPDR S&P Insurance ETF (KIE): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).