Overview of KCE
The SPDR S&P Capital Markets ETF invests in a portfolio of capital market companies and seeks to provide returns that correspond to the S&P Capital Markets Select Industry Index, which is an equal-weighted index. Its equal-weighting means it is tilted toward smaller companies. This fund primarily invests in investment management companies like State Street Corp (STT), Northern Trust Corporation (NTRS), and Charles Schwab Group (SCHW). The top ten holdings make up 26.5% of the KCE ETF.
As of November 24, KCE had a market capitalization of $125 million. Year-to-date, shares of KCE have underperformed US Stock Markets (SPY) and the financial sector, falling 9.2%.
Moving average analysis
On November 23, shares of KCE closed at $46.15, above its 100-day, 50-day, and 20-day moving averages of $45.90, $43.80, and $45.47, respectively.
The chart above shows that KCE crossed above its 100-day moving average on November 18. Technical analysts view this as a buy signal. However, this capital market ETF lags the financial sector ETFs covering the insurance sector as well as regional banks.
The 14-day Relative Strength Index (or RSI) for the KCE ETF was 58.9 as of November 23. The RSI for KCE has improved from 25.9 on September 4, when global stock markets plunged following the devaluation of the yuan. Capital market ETFs suffered the most, as trading commissions were hit hard. An RSI figure below 30 is an indication of an oversold stock while an RSI above 70 denotes an overbought stock.