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Is Guggenheim Multi-Asset Income ETF (CVY) a Hot ETF Right Now?
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A smart beta exchange traded fund, the Guggenheim Multi-Asset Income ETF (CVY - Free Report) debuted on 09/21/2006, and offers broad exposure to the Total Market (U.S.) ETFs category of the U.S. equity 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $294.75 M, which makes it one of the larger ETFs in the Total Market (U.S.) ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Zacks Multi-Asset Income Index.
The Zacks Multi-Asset Income Index is comprised of approximately 125 to 150 stocks selected, based on a multi-factor proprietary model, from a universe of domestic and international companies, including U.S.-listed common stocks, ADRs paying dividends, REITs, MLPs, closed-end funds and traditional preferred stocks.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.79% for CVY, making it on par with most peer products in the space.
CVY's 12-month trailing dividend yield is 3.96%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Valero Energy Corp (VLO - Free Report) accounts for about 1.35% of the fund's total assets, followed by Phillips 66 (PSX - Free Report) and Host Hotels & Resorts Inc (HST - Free Report) .
CVY's top 10 holdings account for about 11.7% of its total assets under management.
Performance and Risk
CVY has gained about 1.38% so far this year, and as of 06/14/2018, is up roughly 10.38% in the last one year. In the past 52-week period, the fund has traded between $20.64 and $23.39.
CVY has a beta of 0.86 and standard deviation of 12.73% for the trailing three-year period. With about 149 holdings, it effectively diversifies company-specific risk.
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 Guggenheim Multi-Asset Income ETF (CVY) a Hot ETF Right Now?
A smart beta exchange traded fund, the Guggenheim Multi-Asset Income ETF (CVY - Free Report) debuted on 09/21/2006, and offers broad exposure to the Total Market (U.S.) ETFs category of the U.S. equity 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $294.75 M, which makes it one of the larger ETFs in the Total Market (U.S.) ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Zacks Multi-Asset Income Index.
The Zacks Multi-Asset Income Index is comprised of approximately 125 to 150 stocks selected, based on a multi-factor proprietary model, from a universe of domestic and international companies, including U.S.-listed common stocks, ADRs paying dividends, REITs, MLPs, closed-end funds and traditional preferred stocks.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.79% for CVY, making it on par with most peer products in the space.
CVY's 12-month trailing dividend yield is 3.96%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Valero Energy Corp (VLO - Free Report) accounts for about 1.35% of the fund's total assets, followed by Phillips 66 (PSX - Free Report) and Host Hotels & Resorts Inc (HST - Free Report) .
CVY's top 10 holdings account for about 11.7% of its total assets under management.
Performance and Risk
CVY has gained about 1.38% so far this year, and as of 06/14/2018, is up roughly 10.38% in the last one year. In the past 52-week period, the fund has traded between $20.64 and $23.39.
CVY has a beta of 0.86 and standard deviation of 12.73% for the trailing three-year period. With about 149 holdings, it effectively diversifies company-specific risk.
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.