The SPDR KBW Insurance ETF (NYSEArca: KIE), an equal-weight ETF, is up nearly 4% this year. KIE’s cap-weighted rival, the iShares US Insurance ETF (NYSEArca: IAK), which features a large combined allocation to American International Group (NYSE: AIG), MetLife (NYSE: MET), Prudential (NYSE: PRU) and Dow component Travelers (NYSE: TRV), is up 2.6%.
IAK’s top-10 holdings combine for nearly two-third of the ETF’s weight and the fund’s “weighted average market capitalization is $32 billion. From a cost perspective, IAK has a 0.45% expense ratio, trades with a $0.09 bid/ask spread and closed yesterday at a modest 0.04% premium to its net asset value,” said S&P Capital IQ.
KIE “is a year older than IAK and has $320 million in assets. Tracking an S&P index that is equally weighted, KIE is more diversified at the security level despite having fewer (49) individual holdings. Top-10 holdings made up only 21% of assets and the weighted average market capitalization of $13 billion,” said the research firm. “From a cost perspective, KIE has a lower 0.35% expense ratio and trades with a tighter $0.03 bid/ask spread. It traded a modest 0.02% discount to NAV.”
Despite the obvious weighting differences, IAK and KIE performed nearly in-line with each other last year when Treasury yields soared. S&P Capital IQ rates both ETFs overweight. [Insurance ETFs Search for new Highs]
SPDR S&P Insurance ETF
