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Is Invesco Zacks Multi-Asset Income ETF (CVY) a Hot ETF Right Now?

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The Invesco Zacks Multi-Asset Income ETF (CVY - Free Report) was launched on 09/21/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Total Market (U.S.) 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.

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.

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.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

CVY is managed by Invesco, and this fund has amassed over $280.50 M, which makes it one of the larger ETFs in the Total Market (U.S.) ETFs. CVY 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

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.

With one of the most expensive products in the space, this ETF has annual operating expenses of 0.79%.

The fund has a 12-month trailing dividend yield of 3.90%.

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.

Taking into account individual holdings, Hi-Crush Partners Lp accounts for about 2.19% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Citigroup Inc (C - Free Report) .

Its top 10 holdings account for approximately 11.94% of CVY's total assets under management.

Performance and Risk

So far this year, the ETF has added about 2.44%, and was up about 8.83% in the last one year (as of 09/19/2018). CVY has traded between $21.19 and $23.39 in the past 52-week period.

The ETF has a beta of 0.85 and standard deviation of 12.05% 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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Citigroup Inc. (C) - free report >>

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Invesco Zacks Multi-Asset Income ETF (CVY) - free report >>