News

The Invesco KBW Property & Casualty Insurance ETF (KBWP) was launched on 12/02/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Insurance 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.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Financials - Insurance is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $232.90 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Insurance segment of the equity market. KBWP seeks to match the performance of the KBW Nasdaq Property & Casualty Index before fees and expenses.

The KBW Nasdaq Property & Casualty Index is a modified market capitalization weighted index that reflects the performance of approximately 24 property and casualty insurance companies.

Costs

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 counterparts, other things remaining the same.

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 1.48%.

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, Travelers Cos Inc/the (TRV) accounts for about 8.27% of total assets, followed by American International Group Inc (AIG) and Allstate Corp/the (ALL).

The top 10 holdings account for about 60.43% of total assets under management.

Performance and Risk

The ETF has added roughly 13.35% and is up about 18.68% so far this year and in the past one year (as of 03/11/2024), respectively. KBWP has traded between $78.84 and $103.02 during this last 52-week period.

The ETF has a beta of 0.61 and standard deviation of 18.67% for the trailing three-year period, making it a medium risk choice in the space. With about 26 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco KBW Property & Casualty Insurance ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, KBWP is a good option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

IShares U.S. Insurance ETF (IAK) tracks Dow Jones U.S. Select Insurance Index and the SPDR S&P Insurance ETF (KIE) tracks S&P Insurance Select Industry Index. IShares U.S. Insurance ETF has $606.91 million in assets, SPDR S&P Insurance ETF has $739.70 million. IAK has an expense ratio of 0.40% and KIE charges 0.35%.

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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iShares U.S. Insurance ETF (IAK): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.