Should You Invest in the State Street SPDR S&P Capital Markets ETF (KCE)?

The State Street SPDR S&P Capital Markets ETF (KCE) was launched on November 8, 2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Brokers/ Capital markets segment of the equity market.Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 - Brokers/ Capital markets is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $554.01 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Brokers/ Capital markets segment of the equity market. KCE seeks to match the performance of the S&P Capital Markets Select Industry Index before fees and expenses.The S&P Capital Markets Select Industry Index represents the capital markets segment of the S&P Total Market Index.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.It 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.This ETF has heaviest allocation in the Financials sector -- about 100% of the portfolio.Looking at individual holdings, Galaxy Digital Inc A (GLXY) accounts for about 2.7% of total assets, followed by Robinhood Markets Inc A (HOOD) and Coinbase Global Inc Class A (COIN).The top 10 holdings account for about 19.33% of total assets under management.Performance and RiskYear-to-date, the State Street SPDR S&P Capital Markets ETF has gained about 6.26% so far, and was up about 2.86% over the last 12 months (as of 11/17/2025). KCE has traded between $108.52 and $157.83 in this past 52-week period.The ETF has a beta of 1.28 and standard deviation of 21.14% 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 sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. KCE, then, is not the best option for investors seeking exposure to the Financials ETFs segment of the market. However, there are better ETFs in the space to consider.iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) tracks Dow Jones U.S. Select Investment Services Index. The fund has $1.59 billion in assets. IAI has an expense ratio of 0.38%.Bottom 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