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Is Invesco Global Short Term High Yield Bond ETF (PGHY) a Strong ETF Right Now?
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Launched on 06/20/2013, the Invesco Global Short Term High Yield Bond ETF (PGHY - Free Report) is a smart beta exchange traded fund offering broad exposure to the High-Yield/Junk Bond 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.
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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
Managed by Invesco, PGHY has amassed assets over $237.40 million, making it one of the average sized ETFs in the High-Yield/Junk Bond ETFs. Before fees and expenses, this particular fund seeks to match the performance of the DB Global Short Maturity High Yield Bond Index.
DB Global Short Maturity High Yield Bond Index tracks US and foreign short-term, non-investment grade bonds denominated in US dollars and is rebalanced quarterly and re-weighted annually.
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.
Operating expenses on an annual basis are 0.35% for PGHY, making it one of the cheaper products in the space.
PGHY's 12-month trailing dividend yield is 5.25%.
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.
Looking at individual holdings, Invesco Government & Agency Portfolio (AGPXX) accounts for about 1.86% of total assets, followed by Cash/receivables/payables (-CASH-) and Ashland Llc-4.75%-08-15-2022 (044209AF1).
PGHY's top 10 holdings account for about 5.51% of its total assets under management.
Performance and Risk
The ETF has gained about 1.45% so far this year and it's up approximately 5.59% in the last one year (as of 10/07/2021). In the past 52-week period, it has traded between $21.51 and $22.25.
The fund has a beta of 0.28 and standard deviation of 10.31% for the trailing three-year period, which makes PGHY a high risk choice in this particular space. With about 469 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Global Short Term High Yield Bond ETF is a reasonable option for investors seeking to outperform the High-Yield/Junk Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR Bloomberg Barclays High Yield Bond ETF (JNK - Free Report) tracks Bloomberg Barclays High Yield Very Liquid Index and the iShares iBoxx High Yield Corporate Bond ETF (HYG - Free Report) tracks Markit iBoxx USD Liquid High Yield Index. SPDR Bloomberg Barclays High Yield Bond ETF has $8.83 billion in assets, iShares iBoxx High Yield Corporate Bond ETF has $19.64 billion. JNK has an expense ratio of 0.40% and HYG charges 0.48%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the High-Yield/Junk 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 Global Short Term High Yield Bond ETF (PGHY) a Strong ETF Right Now?
Launched on 06/20/2013, the Invesco Global Short Term High Yield Bond ETF (PGHY - Free Report) is a smart beta exchange traded fund offering broad exposure to the High-Yield/Junk Bond 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.
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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
Managed by Invesco, PGHY has amassed assets over $237.40 million, making it one of the average sized ETFs in the High-Yield/Junk Bond ETFs. Before fees and expenses, this particular fund seeks to match the performance of the DB Global Short Maturity High Yield Bond Index.
DB Global Short Maturity High Yield Bond Index tracks US and foreign short-term, non-investment grade bonds denominated in US dollars and is rebalanced quarterly and re-weighted annually.
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.
Operating expenses on an annual basis are 0.35% for PGHY, making it one of the cheaper products in the space.
PGHY's 12-month trailing dividend yield is 5.25%.
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.
Looking at individual holdings, Invesco Government & Agency Portfolio (AGPXX) accounts for about 1.86% of total assets, followed by Cash/receivables/payables (-CASH-) and Ashland Llc-4.75%-08-15-2022 (044209AF1).
PGHY's top 10 holdings account for about 5.51% of its total assets under management.
Performance and Risk
The ETF has gained about 1.45% so far this year and it's up approximately 5.59% in the last one year (as of 10/07/2021). In the past 52-week period, it has traded between $21.51 and $22.25.
The fund has a beta of 0.28 and standard deviation of 10.31% for the trailing three-year period, which makes PGHY a high risk choice in this particular space. With about 469 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Global Short Term High Yield Bond ETF is a reasonable option for investors seeking to outperform the High-Yield/Junk Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR Bloomberg Barclays High Yield Bond ETF (JNK - Free Report) tracks Bloomberg Barclays High Yield Very Liquid Index and the iShares iBoxx High Yield Corporate Bond ETF (HYG - Free Report) tracks Markit iBoxx USD Liquid High Yield Index. SPDR Bloomberg Barclays High Yield Bond ETF has $8.83 billion in assets, iShares iBoxx High Yield Corporate Bond ETF has $19.64 billion. JNK has an expense ratio of 0.40% and HYG charges 0.48%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the High-Yield/Junk 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.