ETF Trends publisher Tom Lydon discussed SPDR S&P Insurance ETF (KIE) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.
Back-to-back Hurricanes have smashed insurance company stocks. KIE fell over 10% since the August high to test its 200-day simple moving average support.
Insurance company shares may be punished more than they should be; Insurers are well-capitalized against hurricane effects.
Insurers should be well capitalized to meet requirements since they should have been prepared before hand; CFRA estimates industry has a $300 billion cash cushion.
To put in perspective, Harvey damages are estimated at $10 billion to $15 billion, with worst case scenario at $20 billion.
KIE tries to reflect the performance of the S&P Insurance Select Industry. Its sector weights include property & casualty insurance 40.4%, life & health insurance 26.5%, insurance brokers 12.0%, multi-line insurance 11.0%, and reinsurance 10.0%.
Click here to listen to the podcast.
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