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Is Invesco 1-30 Laddered Treasury ETF (PLW) a Strong ETF Right Now?
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Making its debut on 10/11/2007, smart beta exchange traded fund Invesco 1-30 Laddered Treasury ETF provides investors broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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
The fund is sponsored by Invesco. It has amassed assets over $620.85 million, making it one of the average sized ETFs in the Government Bond ETFs. This particular fund 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 PLW, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.91%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, United States Treasury Note/bond-3.50%-02-15-2033 accounts for about 6.77% of the fund's total assets, followed by United States Treasury Note/bond-4.50%-02-15-2036 and United States Treasury Note/bond-3.62%-02-15-2053.
The top 10 holdings account for about 40.27% of total assets under management.
Performance and Risk
Year-to-date, the Invesco 1-30 Laddered Treasury ETF return is roughly 3.91% so far, and is down about -5.03% over the last 12 months (as of 04/24/2023). PLW has traded between $27.43 and $32.28 in this past 52-week period.
PLW has a beta of 0.04 and standard deviation of 9.82% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 30 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 $8.01 billion in assets, iShares 20+ Year Treasury Bond ETF has $34.83 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?
Making its debut on 10/11/2007, smart beta exchange traded fund Invesco 1-30 Laddered Treasury ETF provides investors broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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
The fund is sponsored by Invesco. It has amassed assets over $620.85 million, making it one of the average sized ETFs in the Government Bond ETFs. This particular fund 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 PLW, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.91%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, United States Treasury Note/bond-3.50%-02-15-2033 accounts for about 6.77% of the fund's total assets, followed by United States Treasury Note/bond-4.50%-02-15-2036 and United States Treasury Note/bond-3.62%-02-15-2053.
The top 10 holdings account for about 40.27% of total assets under management.
Performance and Risk
Year-to-date, the Invesco 1-30 Laddered Treasury ETF return is roughly 3.91% so far, and is down about -5.03% over the last 12 months (as of 04/24/2023). PLW has traded between $27.43 and $32.28 in this past 52-week period.
PLW has a beta of 0.04 and standard deviation of 9.82% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 30 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 $8.01 billion in assets, iShares 20+ Year Treasury Bond ETF has $34.83 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.