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Is Invesco Equal Weight 0-30 Year Treasury ETF (GOVI) a Strong ETF Right Now?
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Launched on 10/11/2007, the Invesco Equal Weight 0-30 Year Treasury ETF (GOVI - Free Report) is a smart beta exchange traded fund offering 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
The fund is managed by Invesco. GOVI has been able to amass assets over $792.04 million, making it one of the average sized ETFs in the Government Bond ETFs. Before fees and expenses, GOVI seeks to match the performance of the ICE 1-30 YR LADDERED MATURITY US TRSR ID.
The ICE 1-30 Year Laddered Maturity US Treasury Index is designed to track the performance of up to 30 U.S. Treasury Notes or Bonds representing the annual February maturity ladder across the yield curve.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.15%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.86%.
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 6.74% of total assets, followed by United States Treasury Note/bond-2.75%-2-15-2024 and United States Treasury Note/bond-2.75%-2-15-2028.
Its top 10 holdings account for approximately 38.38% of GOVI's total assets under management.
Performance and Risk
The ETF has gained about 4.18% so far this year and was up about 0% in the last one year (as of 12/29/2023). In the past 52-week period, it has traded between $25.78 and $29.11.
The fund has a beta of 0.08. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Equal Weight 0-30 Year 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.
Vanguard Long-Term Treasury ETF (VGLT - Free Report) tracks Bloomberg Barclays U.S. Long Government Float Adjusted Index and the iShares 20+ Year Treasury Bond ETF (TLT - Free Report) tracks ICE U.S. Treasury 20+ Year Bond Index. Vanguard Long-Term Treasury ETF has $9.60 billion in assets, iShares 20+ Year Treasury Bond ETF has $51.28 billion. VGLT has an expense ratio of 0.04% 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 Equal Weight 0-30 Year Treasury ETF (GOVI) a Strong ETF Right Now?
Launched on 10/11/2007, the Invesco Equal Weight 0-30 Year Treasury ETF (GOVI - Free Report) is a smart beta exchange traded fund offering 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
The fund is managed by Invesco. GOVI has been able to amass assets over $792.04 million, making it one of the average sized ETFs in the Government Bond ETFs. Before fees and expenses, GOVI seeks to match the performance of the ICE 1-30 YR LADDERED MATURITY US TRSR ID.
The ICE 1-30 Year Laddered Maturity US Treasury Index is designed to track the performance of up to 30 U.S. Treasury Notes or Bonds representing the annual February maturity ladder across the yield curve.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.15%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.86%.
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 6.74% of total assets, followed by United States Treasury Note/bond-2.75%-2-15-2024 and United States Treasury Note/bond-2.75%-2-15-2028.
Its top 10 holdings account for approximately 38.38% of GOVI's total assets under management.
Performance and Risk
The ETF has gained about 4.18% so far this year and was up about 0% in the last one year (as of 12/29/2023). In the past 52-week period, it has traded between $25.78 and $29.11.
The fund has a beta of 0.08. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Equal Weight 0-30 Year 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.
Vanguard Long-Term Treasury ETF (VGLT - Free Report) tracks Bloomberg Barclays U.S. Long Government Float Adjusted Index and the iShares 20+ Year Treasury Bond ETF (TLT - Free Report) tracks ICE U.S. Treasury 20+ Year Bond Index. Vanguard Long-Term Treasury ETF has $9.60 billion in assets, iShares 20+ Year Treasury Bond ETF has $51.28 billion. VGLT has an expense ratio of 0.04% 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.