For investors seeking momentum, SPDR S&P Insurance (NYSE:KIE) ETF ( (LON:KIE) ) is probably on radar now. The fund just hit a 52-week high, and is up roughly 36.1% from its 52-week low price of $61.34/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
KIE in Focus
KIE targets the insurance corner of the broad financial space and offers a diversified exposure to 49 stocks with each holding less than 3.2% of assets, suggesting no concentration risk. It is diversified across market spectrums with 44% in mid caps, 38% in large caps and the rest in small caps. About 37% of the portfolio is allocated to property and casualty insurance while life & health insurance accounts for one-fourth share. The fund charges investors 35 basis points a year in fees (see: all the Financial ETFs here).
Why the Move?
The insurance sector has been an area to watch lately as the Fed seems to be on its way to raise interest rates for the second time in 10 years in its December meeting given the string of solid data and Trump fueled economic optimism. Insurance stocks are one of the prime beneficiaries of a rate hike, as these are able to earn higher returns on their investment portfolio of longer-duration bonds in a rising interest rate environment.
More Gains Ahead?
Currently, KIE has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook, so it is hard to get a handle on its future returns in one way or the other. However, many of the segments that make up this ETF have strong a Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.
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SPDR-KBW INSUR (KIE): ETF Research Reports
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Zacks Investment Research