Related: Struggle and Trouble Ahead for Bank ETFs?

Furthermore, within the financial space, insurance companies will also capitalize on rising interest rates. Insurance stocks have typically exhibited a positive correlation with interest rates where higher rates have translated to higher growth. Along with generating greater revenue through new higher yielding debt holdings in a rising rate environment, insurers may also capitalize on a healthier economic environment as consumers purchase big-tick items and buy a home, which may mean more insurance policy coverage.

A broad financial sector ETF may include some insurance exposure – XLF has 16.6% in insurance, but investors can also consider insurance sector-specific ETFs. ETF investors can use the SPDR S&P Insurance ETF (NYSEArca: KIE), iShares US Insurance ETF (NYSEArca: IAK) and PowerShares KBW Property & Casualty Insurance Portfolio (NYSEArca: KBWP) to capture broad exposure to insurance providers as interest rates rise.

SDPR Regional Banking ETF

Tom Lydon’s clients own shares of XLF.

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.