Is State Street SPDR S&P Capital Markets ETF (KCE) a Strong ETF Right Now?

Making its debut on 11/08/2005, smart beta exchange traded fund State Street SPDR S&P Capital Markets ETF (KCE) provides investors broad exposure to the Financials ETFs category of the market.What Are Smart Beta ETFs?The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.Fund Sponsor & IndexManaged by State Street Investment Management, KCE has amassed assets over $541.31 million, making it one of the average sized ETFs in the Financials ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Capital Markets Select Industry Index.The S&P Capital Markets Select Industry Index represents the capital markets segment of the S&P Total Market Index.Cost & Other ExpensesWhen considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.The fund has a 12-month trailing dividend yield of 1.56%.Sector Exposure and Top HoldingsEven 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.For KCE, it has heaviest allocation in the Financials sector --about 100% of the portfolio.When you look at individual holdings, Galaxy Digital Inc A (GLXY) accounts for about 2.7% of the fund's total assets, followed by Robinhood Markets Inc A (HOOD) and Coinbase Global Inc Class A (COIN).Its top 10 holdings account for approximately 19.33% of KCE's total assets under management.Performance and RiskSo far this year, KCE has added about 6.01%, and is down about -1.04% in the last one year (as of 12/02/2025). During this past 52-week period, the fund has traded between $108.52 and $157.83.The ETF has a beta of 1.28 and standard deviation of 21.18% for the trailing three-year period, making it a high risk choice in the space. With about 65 holdings, it effectively diversifies company-specific risk .AlternativesState Street SPDR S&P Capital Markets ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.iShares U.S. Broker-Dealers & Securities Exchanges ETF(IAI) tracks Dow Jones U.S. Select Investment Services Index The fund has $1.51 billion in assets. IAI has an expense ratio of 0.38%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFsBottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>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 State Street SPDR S&P Capital Markets ETF (KCE): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks