Yahoo Finance Should You Invest in the Invesco KBW Property & Casualty Insurance ETF (KBWP)?
Designed to provide broad exposure to the Financials - Insurance segment of the equity market, the Invesco KBW Property & Casualty Insurance ETF (KBWP) is a passively managed exchange traded fund launched on 12/02/2010.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $318.73 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that 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, Progressive Corp/the (PGR) accounts for about 8.47% of total assets, followed by Allstate Corp/the (ALL) and American International Group Inc (AIG).
The top 10 holdings account for about 60.83% of total assets under management.
Performance and Risk
The ETF has gained about 17.50% and it's up approximately 28.21% so far this year and in the past one year (as of 05/14/2024), respectively. KBWP has traded between $78.84 and $107.75 during this last 52-week period.
The ETF has a beta of 0.61 and standard deviation of 18.49% for the trailing three-year period, making it a medium risk choice in the space. With about 25 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 reasonable 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 $647.36 million in assets, SPDR S&P Insurance ETF has $715.29 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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Invesco KBW Property & Casualty Insurance ETF (KBWP): ETF Research Reports
American International Group, Inc. (AIG) : Free Stock Analysis Report
The Allstate Corporation (ALL) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
iShares U.S. Insurance ETF (IAK): ETF Research Reports
SPDR S&P Insurance ETF (KIE): ETF Research Reports
