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Is Invesco KBW Premium Yield Equity REIT ETF (KBWY) a Strong ETF Right Now?
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The Invesco KBW Premium Yield Equity REIT ETF (KBWY - Free Report) was launched on 12/02/2010, and is a smart beta exchange traded fund designed to offer broad exposure to the Real Estate ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $353.12 million, this makes it one of the average sized ETFs in the Real Estate ETFs. KBWY is managed by Invesco. KBWY seeks to match the performance of the KBW Nasdaq Premium Yield Equity REIT Index before fees and expenses.
The KBW Nasdaq Premium Yield Equity REIT Index is a dividend weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the US.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for KBWY are 0.35%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 7.22%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For KBWY, it has heaviest allocation in the Real Estate sector --about 100% of the portfolio.
Looking at individual holdings, American Finance Trust Inc accounts for about 5.40% of total assets, followed by Global Net Lease Inc (GNL - Free Report) and Office Properties Income Trust (OPI - Free Report) .
KBWY's top 10 holdings account for about 44.19% of its total assets under management.
Performance and Risk
The ETF has added roughly 16.42% and is up about 33.21% so far this year and in the past one year (as of 07/09/2021), respectively. KBWY has traded between $16.20 and $24.19 during this last 52-week period.
KBWY has a beta of 1.34 and standard deviation of 38.41% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco KBW Premium Yield Equity REIT ETF is a reasonable option for investors seeking to outperform the Real Estate ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. REIT ETF (SCHH - Free Report) tracks Dow Jones U.S. Select REIT Index and the iShares U.S. Real Estate ETF (IYR - Free Report) tracks Dow Jones U.S. Real Estate Index. Schwab U.S. REIT ETF has $6.05 billion in assets, iShares U.S. Real Estate ETF has $6.08 billion. SCHH has an expense ratio of 0.07% and IYR charges 0.42%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Real Estate ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco KBW Premium Yield Equity REIT ETF (KBWY) a Strong ETF Right Now?
The Invesco KBW Premium Yield Equity REIT ETF (KBWY - Free Report) was launched on 12/02/2010, and is a smart beta exchange traded fund designed to offer broad exposure to the Real Estate ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $353.12 million, this makes it one of the average sized ETFs in the Real Estate ETFs. KBWY is managed by Invesco. KBWY seeks to match the performance of the KBW Nasdaq Premium Yield Equity REIT Index before fees and expenses.
The KBW Nasdaq Premium Yield Equity REIT Index is a dividend weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the US.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for KBWY are 0.35%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 7.22%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For KBWY, it has heaviest allocation in the Real Estate sector --about 100% of the portfolio.
Looking at individual holdings, American Finance Trust Inc accounts for about 5.40% of total assets, followed by Global Net Lease Inc (GNL - Free Report) and Office Properties Income Trust (OPI - Free Report) .
KBWY's top 10 holdings account for about 44.19% of its total assets under management.
Performance and Risk
The ETF has added roughly 16.42% and is up about 33.21% so far this year and in the past one year (as of 07/09/2021), respectively. KBWY has traded between $16.20 and $24.19 during this last 52-week period.
KBWY has a beta of 1.34 and standard deviation of 38.41% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco KBW Premium Yield Equity REIT ETF is a reasonable option for investors seeking to outperform the Real Estate ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. REIT ETF (SCHH - Free Report) tracks Dow Jones U.S. Select REIT Index and the iShares U.S. Real Estate ETF (IYR - Free Report) tracks Dow Jones U.S. Real Estate Index. Schwab U.S. REIT ETF has $6.05 billion in assets, iShares U.S. Real Estate ETF has $6.08 billion. SCHH has an expense ratio of 0.07% and IYR charges 0.42%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Real Estate ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.