A favorable aspect of ETFs is that investors can target a specific sector without having to corner the market in industry stocks. With ETFs, investors can get instant exposure to an industry they want to invest in with one transaction while diversifying their portfolios and managing risk. If you want to target the insurance sector, there are a few ETF choices for your portfolio. While this is not a list of every available option, if you are seeking an opportunity in the insurance industry, take a look at these ETFs to get started.
IAK: iShares U.S. Insurance ETF
This insurance fund from iShares tracks a benchmark composed of U.S. equities in the insurance sector. Some of those equities include AIG, MetLife, Prudential, and Travelers. Most of the equities are focused on the property and casualty sector of the insurance industry, but they also include life insurance and full line insurance. IAK has been trading since May of 2006.
KIE: SPDR S&P Insurance ETF
This ETF correlates with the S&P Insurance Select Industry Index and typically invests at least 90% of its total assets in securities within this index. Some of the holdings in both the fund and the benchmark include Hanover Insurance Group, First American Financial Group, Chubb Corporation, and Travelers. The fund currently manages $436.71 million in assets and has been trading since November of 2005.
KBWP: Invesco KBW Property & Casualty Insurance ETF
KBWP, which tracks the KBW Property & Casualty Index, holds company stocks such as Allstate, Travelers, Chubb Corporation, and Progressive Corporation. The ETF and benchmark hold almost two dozen stocks. The KBWP fund has been trading since 2010. While these funds give you access to the insurance sector, they come with other advantages as well, including tax benefits. ETFs are traded less frequently, and investors can control the timing of when taxes are due on any capital gains made from their ETFs. ETFs are not without risk, so be sure to research each fund thoroughly before making any trades. Watch how they react to different market conditions and understand what companies are included in the fund and why they are included. As with any investments, if you have any questions or concerns, be sure to consult a financial professional such as an adviser or your broker.
