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Is Invesco 1-30 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 1-30 Laddered Treasury ETF is a smart beta exchange traded fund launched on 10/11/2007.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $545.24 million, which makes it one of the average sized ETFs in the Government Bond ETFs. This particular fund, 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.
With one of the more expensive products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.99%.
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, United States Treasury Note/bond-4.50%-2-15-2036 accounts for about 9.40% of total assets, followed by United States Treasury Note/bond-5.38%-2-15-2031 and United States Treasury Note/bond-7.12%-2-15-2023.
The top 10 holdings account for about 46.22% of total assets under management.
Performance and Risk
The ETF has added roughly 1.51% so far this year and is down about -15.25% in the last one year (as of 02/21/2023). In the past 52-week period, it has traded between $27.43 and $35.65.
PLW has a beta of 0.03 and standard deviation of 11.21% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco 1-30 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.
IShares 10-20 Year Treasury Bond ETF (TLH - Free Report) tracks ICE U.S Treasury 10-20 Year Bond Index and the iShares 20+ Year Treasury Bond ETF (TLT - Free Report) tracks ICE U.S. Treasury 20+ Year Bond Index. IShares 10-20 Year Treasury Bond ETF has $8.31 billion in assets, iShares 20+ Year Treasury Bond ETF has $29.86 billion. TLH has an expense ratio of 0.15% 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 1-30 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 1-30 Laddered Treasury ETF is a smart beta exchange traded fund launched on 10/11/2007.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $545.24 million, which makes it one of the average sized ETFs in the Government Bond ETFs. This particular fund, 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.
With one of the more expensive products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.99%.
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, United States Treasury Note/bond-4.50%-2-15-2036 accounts for about 9.40% of total assets, followed by United States Treasury Note/bond-5.38%-2-15-2031 and United States Treasury Note/bond-7.12%-2-15-2023.
The top 10 holdings account for about 46.22% of total assets under management.
Performance and Risk
The ETF has added roughly 1.51% so far this year and is down about -15.25% in the last one year (as of 02/21/2023). In the past 52-week period, it has traded between $27.43 and $35.65.
PLW has a beta of 0.03 and standard deviation of 11.21% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco 1-30 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.
IShares 10-20 Year Treasury Bond ETF (TLH - Free Report) tracks ICE U.S Treasury 10-20 Year Bond Index and the iShares 20+ Year Treasury Bond ETF (TLT - Free Report) tracks ICE U.S. Treasury 20+ Year Bond Index. IShares 10-20 Year Treasury Bond ETF has $8.31 billion in assets, iShares 20+ Year Treasury Bond ETF has $29.86 billion. TLH has an expense ratio of 0.15% 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.