With 10-year U.S. Treasury yields higher by 18.2% since Feb. 2, financial services exchange traded funds are finding some relief with the Financial Select Sector SPDR (NYSEArca: XLF) rising 4.7% over that period.

More focused (and rate-sensitive) financial services industry funds are doing even better and that ebullience is not limited to regional bank funds. Insurance ETFs, sensitive to Treasury yield gyrations in their own regard, are positively responding to rising bond yields. Among industry ETFs that respond positively to rising Treasury yields, perhaps only regional bank funds have been more desperate for rising rates than insurance ETFs. [A Breakout for Regional Bank ETFs]

Since Feb. 2, the SPDR S&P Insurance ETF (NYSEArca: KIE) and the iShares US Insurance ETF (NYSEArca: IAK) are up an average of 5.5%. In recent days, MetLife (NYSE: MET) closed at its highest levels in nearly seven years while Prudential (NYSE: PRU) accomplished the same feat. Dow component Travelers (NYSE: TRV) hit an all-time high. Those stocks combine for almost 23% of IAK’s weight. [Insurance ETFs Loving Treasury Action]

The $292 million KIE is an equal-weight ETF where none of the fund’s 51 holdings account for more than 2.24% of its weight. Even with lower interest rates, insurance companies have been able to manage earnings in solid fashion, providing investors with a fair amount of the financial services sector’s recent earnings surprises.

When 10-year yields surged in 2013, KIE climbed 45.6%, topping the S&P 500 by 1,330 basis points. KIE climbed by 40% in 2013. Although interest rates remaining low has weighed on insurance stocks and ETFs, the industry’s fundamentals are healthy and increased regulatory scrutiny has not triggered material changes to the industry’s business model. [Insurance ETFs Long for Rising Rates]

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