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Is Invesco 130 Laddered Treasury ETF (PLW) a Strong ETF Right Now?
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Designed to provide broad exposure to the Government Bond ETFs category of the market, the Invesco 130 Laddered Treasury ETF is a smart beta exchange traded fund launched on 10/11/2007.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
PLW is managed by Invesco, and this fund has amassed over $482.42 million, which makes it one of the average sized ETFs in the Government Bond ETFs. PLW seeks to match the performance of the Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index before fees and expenses.
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
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 0.25% for this ETF, which makes it one of the more expensive products in the space.
PLW's 12-month trailing dividend yield is 1.82%.
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.
Looking at individual holdings, United States Treasury Note/bond-4.50%-2-15-2036 accounts for about 9.50% of total assets, followed by United States Treasury Note/bond-5.38%-2-15-2031 and United States Treasury Note/bond-2.75%-2-15-2024.
Its top 10 holdings account for approximately 45.61% of PLW's total assets under management.
Performance and Risk
The ETF has lost about -20.22% and is down about -20.81% so far this year and in the past one year (as of 10/17/2022), respectively. PLW has traded between $28.38 and $37.38 during this last 52-week period.
PLW has a beta of 0 and standard deviation of 10.76% for the trailing three-year period, which makes the fund a high risk choice in the 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 $4.92 billion in assets, iShares 20 Year Treasury Bond ETF has $24.05 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.
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Is Invesco 130 Laddered Treasury ETF (PLW) a Strong ETF Right Now?
Designed to provide broad exposure to the Government Bond ETFs category of the market, the Invesco 130 Laddered Treasury ETF is a smart beta exchange traded fund launched on 10/11/2007.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
PLW is managed by Invesco, and this fund has amassed over $482.42 million, which makes it one of the average sized ETFs in the Government Bond ETFs. PLW seeks to match the performance of the Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index before fees and expenses.
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
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 0.25% for this ETF, which makes it one of the more expensive products in the space.
PLW's 12-month trailing dividend yield is 1.82%.
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.
Looking at individual holdings, United States Treasury Note/bond-4.50%-2-15-2036 accounts for about 9.50% of total assets, followed by United States Treasury Note/bond-5.38%-2-15-2031 and United States Treasury Note/bond-2.75%-2-15-2024.
Its top 10 holdings account for approximately 45.61% of PLW's total assets under management.
Performance and Risk
The ETF has lost about -20.22% and is down about -20.81% so far this year and in the past one year (as of 10/17/2022), respectively. PLW has traded between $28.38 and $37.38 during this last 52-week period.
PLW has a beta of 0 and standard deviation of 10.76% for the trailing three-year period, which makes the fund a high risk choice in the 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 $4.92 billion in assets, iShares 20 Year Treasury Bond ETF has $24.05 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.