Increased confidence in iShares US Insurance ETF's prospects relative to its Morningstar Category peers leads to an upgrade in this strategy's Morningstar Medalist Rating to Silver from Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The equity team managing the passive strategy drives the strategy's Above Average People Pillar rating. The strategy's sensible investment philosophy earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a substantial overweight position in quality exposure and has a substantial underweight in volatility exposure compared with category peers. A high quality exposure means holding stocks that are consistently profitable, growing, and have solid balance sheets. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. The strategy has a solid parent that earns an Above Average Parent Pillar rating. This firm has had overall attractive fees and a strong success ratio across its product lineup.

Analyst Rating

Chubb

Progressive

Aflac

MetLife

Allstate

Arch Capital

Travelers

Prudential Financial

Hartford Financial Services Group

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. iShares US Insurance ETF earns an Above Average Process Pillar rating. The primary contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Excellent risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. Lastly, the process is limited by its parent firm's risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.1 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the Dow Jones U.S. Select Insurance Index composed of U.S. equities in the insurance sector.  The fund generally will invest at least 80% of its assets in the component securities of its underlying index and in investments that have economic characteristics that are substantially identical to the component securities of its underlying index and may invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents as well as in securities not included in the underlying index, and but which BFA believes will help the fund track the index. The fund is non-diversified. 

 The portfolio is overweight in financial services by 17.0 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared to category peers are technology and industrials, with technology underweighting the average portfolio by 5.9 percentage points of assets and industrials similar to the average. The portfolio is positioned across 59 holdings and is quite concentrated. Specifically, 62.7% of the fund’s assets are housed within the top 10 holdings, compared to the typical peer's 49.0%. And finally, in terms of portfolio turnover, this fund trades less regularly than the typical peer in its category, which may result in a lower cost to investors.

Above Average

Process

iShares’s equity team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are three managers listed on the fund: Paul Whitehead, Jennifer Hsui, Greg Savage. The team is well equipped, with an average of 17 years of portfolio management experience. Together, they manage a total of 258 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate. The team has undergone a bout of turnover recently, with Amy Whitelaw leaving within the last five months. Even though it is a passive fund, high turnover can still hinder the effectiveness of the investment process. 

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares U.S. Insurance ETF

IAK tracks a market-cap index of US insurance companies.

IAK covers insurance companies in the US, benefiting secularly from improving demographics and more uniquely now from higher fixed income rates. The confluence of factors that benefit both fixed income and equity markets helps the asset management businesses within insurance companies. Moreover, these benefits come with limited risks to the operational side.

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The iShares U.S. Insurance ETF (IAK) was launched on 05/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Insurance segment of the equity market.

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iShares U.S. Insurance ETF focuses on United States insurance companies, primarily those centered on property & casualty insurance. IAK could profit in the medium term amid high inflation as well in the long term from technological collaborations.

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Lets dig into earnings of some of the prominent insurance players.

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This insurance ETF hits a new 52-week high. Are more gains in store for this ETF?

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The year 2022 has been brutal for the stock market due to soaring inflation and the Federal Reserve's aggressive interest rate hikes.

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iShares' IAK soars on rising company profits, helpful Fed moves and a stable industry.

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Hurricane Ian could prove to be one of the most hazardous storms to hit Florida. The storm could benefit/hurt these ETF areas.

News for iShares U.S. Insurance ETF ETF (IAK)