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Is Invesco 130 Laddered Treasury ETF (PLW) a Strong ETF Right Now?
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The Invesco 130 Laddered Treasury ETF made its debut on 10/11/2007, and is a smart beta exchange traded fund that provides broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $462.07 million, making it one of the average sized ETFs in the Government Bond ETFs. PLW seeks to match the performance of the Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index before fees and expenses.
The Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index measures the potential returns of the U.S. Treasury yield curve based on approximately 30 equally weighted U.S. Treasury issues with fixed coupons, scheduled to mature in a proportional, annual sequential structure.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for PLW are 0.25%, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.58%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
When you look at individual holdings, United States Treasury Note/bond-4.50%-2-15-2036 (912810FT0) accounts for about 10.07% of the fund's total assets, followed by United States Treasury Note/bond-5.38%-2-15-2031 (912810FP8) and United States Treasury Note/bond-1.88%-2-15-2051 (912810SU3).
PLW's top 10 holdings account for about 47.21% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco 130 Laddered Treasury ETF has lost about -15.48% so far, and is down about -15.01% over the last 12 months (as of 06/14/2022). PLW has traded between $30.28 and $37.46 in this past 52-week period.
The fund has a beta of -0.08 and standard deviation of 10.33% for the trailing three-year period, which makes PLW a high risk choice in this particular space. With about 28 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco 130 Laddered Treasury ETF is not a suitable option for investors seeking to outperform the Government Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
SPDR Portfolio Long Term Treasury ETF (SPTL - Free Report) tracks Bloomberg Barclays Long U.S. Treasury Index and the iShares 20 Year Treasury Bond ETF (TLT - Free Report) tracks ICE U.S. Treasury 20+ Year Bond Index. SPDR Portfolio Long Term Treasury ETF has $5.23 billion in assets, iShares 20 Year Treasury Bond ETF has $19.30 billion. SPTL has an expense ratio of 0.06% and TLT charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Government Bond 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 130 Laddered Treasury ETF (PLW) a Strong ETF Right Now?
The Invesco 130 Laddered Treasury ETF made its debut on 10/11/2007, and is a smart beta exchange traded fund that provides broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $462.07 million, making it one of the average sized ETFs in the Government Bond ETFs. PLW seeks to match the performance of the Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index before fees and expenses.
The Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index measures the potential returns of the U.S. Treasury yield curve based on approximately 30 equally weighted U.S. Treasury issues with fixed coupons, scheduled to mature in a proportional, annual sequential structure.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for PLW are 0.25%, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.58%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
When you look at individual holdings, United States Treasury Note/bond-4.50%-2-15-2036 (912810FT0) accounts for about 10.07% of the fund's total assets, followed by United States Treasury Note/bond-5.38%-2-15-2031 (912810FP8) and United States Treasury Note/bond-1.88%-2-15-2051 (912810SU3).
PLW's top 10 holdings account for about 47.21% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco 130 Laddered Treasury ETF has lost about -15.48% so far, and is down about -15.01% over the last 12 months (as of 06/14/2022). PLW has traded between $30.28 and $37.46 in this past 52-week period.
The fund has a beta of -0.08 and standard deviation of 10.33% for the trailing three-year period, which makes PLW a high risk choice in this particular space. With about 28 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco 130 Laddered Treasury ETF is not a suitable option for investors seeking to outperform the Government Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
SPDR Portfolio Long Term Treasury ETF (SPTL - Free Report) tracks Bloomberg Barclays Long U.S. Treasury Index and the iShares 20 Year Treasury Bond ETF (TLT - Free Report) tracks ICE U.S. Treasury 20+ Year Bond Index. SPDR Portfolio Long Term Treasury ETF has $5.23 billion in assets, iShares 20 Year Treasury Bond ETF has $19.30 billion. SPTL has an expense ratio of 0.06% and TLT charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Government Bond 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.