I’m still toying with the idea of starting an insurance-only hedge fund.? I own a lot of insurers, and I think that I get the better of that market.

Where I have a harder time is with what to short. Shorting is tactical not structural, and I am less good at the tactical vs structural.? Having a tradable benchmark to short against would be useful, but what exists there?

There is one ETF focused on insurance that has any significant volume — KIE.? In the past, it was capitalization-weighted, but now it is equal-weighted.? That stems from a change in the index that the ETF follows, from one set by KBW to one set by S&P.

Personally, I don’t get the change, but here are my statistics on the change:

The “Old KBW” column comes from segmentation done by KBW.? The other columns are done by me.? There are some matters for judgment:

Do you include Berkshire Hathaway?? I think you should.? Do you include foreign life insurers traded on US exchanges?? I think you should.

I am also more willing to place a company in the “Conglomerate” category because of companies that are in multiple lines of insurance, without a dominant area of insurance that they are in, or, they have significant non-insurance ventures.

Anyway, the new KIE overstates the insurers in Bermuda and the Brokers.? It understates life insurers and conglomerates.

Aside from that, the new S&P index, being equal-weighted, is more mid-cap than a whole market index would be.? Also, if I put more effort into this, I would segment companies into their proportions, and there we be no conglomerates.

These may be trivial concerns to some, but if you are thinking of running a portfolio that might be shorting KIE against other insurance longs, it makes a considerable difference.