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Is Invesco Zacks Multi-Asset Income ETF (CVY) a Hot ETF Right Now?
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A smart beta exchange traded fund, the Invesco Zacks 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 market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
Managed by Invesco, CVY has amassed assets over $285.82 M, making it one of the larger ETFs in the Total Market (U.S.) ETFs. This particular fund seeks to match the performance of the Zacks Multi-Asset Income Index before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.79% for CVY, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 3.94%.
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.
Looking at individual holdings, Darden Restaurants Inc (DRI - Free Report) accounts for about 1.20% of total assets, followed by Eli Lilly & Co (LLY - Free Report) and Macy's Inc (M - Free Report) .
The top 10 holdings account for about 11.27% of total assets under management.
Performance and Risk
The fund's year-to-date return has gained about 1.55%, and is up about 8.51% in the last one year (as of 08/02/2018). CVY has traded between $20.64 and $23.39 in the past 52-week period.
The fund has a beta of 0.86 and standard deviation of 12.62% 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 Invesco Zacks Multi-Asset Income ETF (CVY) a Hot ETF Right Now?
A smart beta exchange traded fund, the Invesco Zacks 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 market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
Managed by Invesco, CVY has amassed assets over $285.82 M, making it one of the larger ETFs in the Total Market (U.S.) ETFs. This particular fund seeks to match the performance of the Zacks Multi-Asset Income Index before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.79% for CVY, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 3.94%.
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.
Looking at individual holdings, Darden Restaurants Inc (DRI - Free Report) accounts for about 1.20% of total assets, followed by Eli Lilly & Co (LLY - Free Report) and Macy's Inc (M - Free Report) .
The top 10 holdings account for about 11.27% of total assets under management.
Performance and Risk
The fund's year-to-date return has gained about 1.55%, and is up about 8.51% in the last one year (as of 08/02/2018). CVY has traded between $20.64 and $23.39 in the past 52-week period.
The fund has a beta of 0.86 and standard deviation of 12.62% 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.