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Should You Invest in the Invesco KBW Property & Casualty Insurance ETF (KBWP)?

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Zacks Equity Research
·3 min read
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The Invesco KBW Property & Casualty Insurance ETF (KBWP) was launched on 12/02/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Insurance segment of the equity market.

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.

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 5, placing it in top 31%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $269.91 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 cheaper products in the space.

It has a 12-month trailing dividend yield of 1.91%.

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, American International Group Inc (AIG) accounts for about 8.59% of total assets, followed by Progressive Corp/the (PGR) and Allstate Corp/the (ALL).

The top 10 holdings account for about 62% of total assets under management.

Performance and Risk

The ETF has added about 3.51% so far this year and is down about -0.81% in the last one year (as of 01/12/2021). In that past 52-week period, it has traded between $45.28 and $75.86.

The ETF has a beta of 0.73 and standard deviation of 27.15% 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 good 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 $65.14 million in assets, SPDR S&P Insurance ETF has $345.71 million. IAK has an expense ratio of 0.42% 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Invesco KBW Property & Casualty Insurance ETF (KBWP): ETF Research Reports
 
The Allstate Corporation (ALL) : Free Stock Analysis Report
 
The Progressive Corporation (PGR) : Free Stock Analysis Report
 
American International Group, Inc. (AIG) : Free Stock Analysis Report
 
SPDR S&P Insurance ETF (KIE): ETF Research Reports
 
iShares U.S. Insurance ETF (IAK): ETF Research Reports
 
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