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

Looking for broad exposure to the Financials - Brokers/ Capital markets segment of the equity market? You should consider the State Street SPDR S&P Capital Markets ETF (KCE), a passively managed exchange traded fund launched on November 8, 2005.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 - Brokers/ Capital markets is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $409.6 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.CostsSince cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.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 1.79%.Sector Exposure and Top HoldingsIt 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, Wisdomtree Inc (WT) accounts for about 2.47% of total assets, followed by Cboe Global Markets Inc (CBOE) and Tradeweb Markets Inc Class A (TW).The top 10 holdings account for about 20.24% of total assets under management.Performance and RiskThe ETF has lost about 9.28% and it's up approximately 7.01% so far this year and in the past one year (as of 03/23/2026), respectively. KCE has traded between $108.52 and $161.48 during this last 52-week period.The ETF has a beta of 1.27 and standard deviation of 21.06% 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 a suitable option for investors seeking exposure to the Financials ETFs segment of the market. Instead, 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 $1.54 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