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

Designed to provide broad exposure to the Financials – Brokers/ Capital markets segment of the equity market, the SPDR S&P Capital Markets ETF (KCE) is a passively managed exchange traded fund launched on 11/08/2005.

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.

Additionally, sector ETFs offer convenient ways 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%.

The fund is sponsored by State Street Global Advisors. It has amassed assets over $518.81 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.

When considering an ETF’s total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 1.51%.

Even 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, Robinhood Markets Inc A (HOOD) accounts for about 2.93% of total assets, followed by Donnelley Financial Solution (DFIN) and Coinbase Global Inc Class A (COIN).

The top 10 holdings account for about 19.70% of total assets under management.

So far this year, KCE has gained about 9.97%, and it’s up approximately 33.83% in the last one year (as of 07/14/2025). During this past 52-week period, the fund has traded between $108.52 and $151.49.

The ETF has a beta of 1.23 and standard deviation of 22.68% 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.