Should You Invest in the Invesco KBW Property & Casualty Insurance ETF (KBWP)?
Launched on 12/02/2010, the Invesco KBW Property & Casualty Insurance ETF (KBWP) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Insurance segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options 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 10, placing it in bottom 38%.
The fund is sponsored by Invesco. It has amassed assets over $368.83 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 1.95%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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, Allstate Corp/the (ALL) accounts for about 8.22% of total assets, followed by American International Group Inc (AIG) and Travelers Cos Inc/the (TRV).
The top 10 holdings account for about 61.16% of total assets under management.
Performance and Risk
Year-to-date, the Invesco KBW Property & Casualty Insurance ETF return is roughly 2.27% so far, and was up about 13.59% over the last 12 months (as of 01/30/2023). KBWP has traded between $72.63 and $89.60 in this past 52-week period.
The ETF has a beta of 0.67 and standard deviation of 28.97% 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.
SPDR S&P Insurance ETF (KIE) tracks S&P Insurance Select Industry Index and the iShares U.S. Insurance ETF (IAK) tracks Dow Jones U.S. Select Insurance Index. SPDR S&P Insurance ETF has $576.33 million in assets, iShares U.S. Insurance ETF has $577.36 million. KIE has an expense ratio of 0.35% and IAK charges 0.39%.
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 Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
The Allstate Corporation (ALL) : Free Stock Analysis Report
iShares U.S. Insurance ETF (IAK): ETF Research Reports
SPDR S&P Insurance ETF (KIE): ETF Research Reports
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