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Is Invesco 1-30 Laddered Treasury ETF (PLW) a Strong ETF Right Now?
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The Invesco 1-30 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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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 sponsored by Invesco. It has amassed assets over $644.74 million, making it one of the average sized ETFs in the Government Bond ETFs. Before fees and expenses, this particular fund 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.25%, making it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.31%.
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-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.
PLW's top 10 holdings account for about 40.27% of its total assets under management.
Performance and Risk
So far this year, PLW has added about 2.21%, and is down about -4.17% in the last one year (as of 06/30/2023). During this past 52-week period, the fund has traded between $27.43 and $32.28.
PLW has a beta of 0.04 and standard deviation of 9.97% 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 a reasonable option for investors seeking to outperform the Government Bond ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $8.44 billion in assets, iShares 20+ Year Treasury Bond ETF has $38.59 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?
The Invesco 1-30 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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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 sponsored by Invesco. It has amassed assets over $644.74 million, making it one of the average sized ETFs in the Government Bond ETFs. Before fees and expenses, this particular fund 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.25%, making it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.31%.
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-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.
PLW's top 10 holdings account for about 40.27% of its total assets under management.
Performance and Risk
So far this year, PLW has added about 2.21%, and is down about -4.17% in the last one year (as of 06/30/2023). During this past 52-week period, the fund has traded between $27.43 and $32.28.
PLW has a beta of 0.04 and standard deviation of 9.97% 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 a reasonable option for investors seeking to outperform the Government Bond ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $8.44 billion in assets, iShares 20+ Year Treasury Bond ETF has $38.59 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.