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.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Insurance is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
The fund is sponsored by Invesco. It has amassed assets over $334.59 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.
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 cheaper products in the space.
It has a 12-month trailing dividend yield of 2.45%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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 9.23% of total assets, followed by Chubb Ltd (CB) and American International Group Inc (AIG).
The top 10 holdings account for about 61.93% of total assets under management.
Performance and Risk
Year-to-date, the Invesco KBW Property & Casualty Insurance ETF has added roughly 12.50% so far, and was up about 13.09% over the last 12 months (as of 11/28/2022). KBWP has traded between $72.63 and $88.41 in this past 52-week period.
The ETF has a beta of 0.67 and standard deviation of 28.90% 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.
Invesco KBW Property & Casualty Insurance ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, KBWP is an outstanding option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $539.01 million in assets, SPDR S&P Insurance ETF has $595.30 million. IAK has an expense ratio of 0.39% and KIE charges 0.35%.
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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