We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco 130 Laddered Treasury ETF (PLW) a Strong ETF Right Now?
Read MoreHide Full Article
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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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, PLW has amassed assets over $420.94 million, making it one of the average sized ETFs in the Government Bond ETFs. PLW, before fees and expenses, seeks to match the performance of the Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index.
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
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.
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 1.10%.
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.
Taking into account 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).
The top 10 holdings account for about 47.21% of total assets under management.
Performance and Risk
The ETF has lost about -2.31% so far this year and is down about -1.52% in the last one year (as of 12/07/2021). In the past 52-week period, it has traded between $34.96 and $38.58.
The fund has a beta of -0.15 and standard deviation of 9.54% 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 $4.89 billion in assets, iShares 20 Year Treasury Bond ETF has $18.98 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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, PLW has amassed assets over $420.94 million, making it one of the average sized ETFs in the Government Bond ETFs. PLW, before fees and expenses, seeks to match the performance of the Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index.
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
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.
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 1.10%.
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.
Taking into account 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).
The top 10 holdings account for about 47.21% of total assets under management.
Performance and Risk
The ETF has lost about -2.31% so far this year and is down about -1.52% in the last one year (as of 12/07/2021). In the past 52-week period, it has traded between $34.96 and $38.58.
The fund has a beta of -0.15 and standard deviation of 9.54% 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 $4.89 billion in assets, iShares 20 Year Treasury Bond ETF has $18.98 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.