The KBW Index Shuffle

December 01, 2011

 

Over the past five years, the S&P Select Capital Markets Index has outperformed the KBW Capital Markets Index by 12 percent.

Capital Markets

Over the same period, the KBW Insurance Index practically overlapped the S&P Insurance Select Industry Index.

Insurance Industry

If, however, you limit your time frame to three years, the KBW Banks Index outperforms the S&P Banks Select Industry Index by 11 percent. At one point, in April 2010, the KBW index was beating the S&P Index by 25 percent.

Bank

Note: All S&P index data prior to 9/12/11 is back-tested.

 

For investors who want large-cap exposure to the above-mentioned industries, the KBW indexes—and the PowerShares ETFs that track them—are your best option.

But for those who, instead, are interested in a more diversified set of companies, the S&P indexes—and the SPDR ETFs that track them—are there for you.

Some ETF insiders think a money dispute was the real story behind SSgA dumping the KBW indexes, but for those looking beyond that, there are clear differences between the KBW and S&P indexes that advisors and investors alike ought to understand.

 

Find your next ETF

Reset All