Invesco US insurance ETF: ‘Subsector innovation’ for asset allocators

Wesley Wilkes, Ntwrk CEO at IronMarket Wealth, remarked on the novelty of the exposure and described INSU as an “interesting one”.

“I really love the subsector innovation and competition in the ETF space,” he said. “It gives great scope for asset allocators like us to play thematic or sector views directly into strategies without the same level of bottom-up work and cost.

“This is particularly true for such subsector plays like insurance or banks, rather than broader-based financial services sector exposure which can be either tactical or more long-term themed exposures.”

From a methodological perspective, however, investors may be cognisant of the make-up of INSU’s basket.

While over 50 constituents may sound reasonably diversified, the nature of the US insurance market – with handful of prominent names – means the strategy allocates almost 30% of its weight to just three names: Chubb, Progressive Corporation and Arthur J Gallagher.