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Is Invesco High Yield Equity Dividend Achievers ETF (PEY) a Strong ETF Right Now?
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The Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) was launched on 12/09/2004, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market.
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.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 $1.29 billion, which makes it one of the largest ETFs in the Style Box - All Cap Value. Before fees and expenses, PEY seeks to match the performance of the NASDAQ US Dividend Achievers 50 Index.
The NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.52%, making it on par with most peer products in the space.
PEY's 12-month trailing dividend yield is 4.80%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 27.30% of the portfolio, the fund has heaviest allocation to the Financials sector; Utilities and Consumer Staples round out the top three.
Taking into account individual holdings, Walgreens Boots Alliance Inc (WBA - Free Report) accounts for about 4.30% of the fund's total assets, followed by Nu Skin Enterprises Inc (NUS - Free Report) and Kennedy-Wilson Holdings Inc (KW - Free Report) .
Its top 10 holdings account for approximately 30.57% of PEY's total assets under management.
Performance and Risk
The ETF has lost about -2.53% and is up about 2.36% so far this year and in the past one year (as of 01/26/2024), respectively. PEY has traded between $18 and $21.76 during this last 52-week period.
The ETF has a beta of 0.90 and standard deviation of 16.66% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco High Yield Equity Dividend Achievers ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $9.46 billion in assets, iShares Core S&P U.S. Value ETF has $15.48 billion. DFAT has an expense ratio of 0.28% and IUSV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
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 High Yield Equity Dividend Achievers ETF (PEY) a Strong ETF Right Now?
The Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) was launched on 12/09/2004, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market.
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.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 $1.29 billion, which makes it one of the largest ETFs in the Style Box - All Cap Value. Before fees and expenses, PEY seeks to match the performance of the NASDAQ US Dividend Achievers 50 Index.
The NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.52%, making it on par with most peer products in the space.
PEY's 12-month trailing dividend yield is 4.80%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 27.30% of the portfolio, the fund has heaviest allocation to the Financials sector; Utilities and Consumer Staples round out the top three.
Taking into account individual holdings, Walgreens Boots Alliance Inc (WBA - Free Report) accounts for about 4.30% of the fund's total assets, followed by Nu Skin Enterprises Inc (NUS - Free Report) and Kennedy-Wilson Holdings Inc (KW - Free Report) .
Its top 10 holdings account for approximately 30.57% of PEY's total assets under management.
Performance and Risk
The ETF has lost about -2.53% and is up about 2.36% so far this year and in the past one year (as of 01/26/2024), respectively. PEY has traded between $18 and $21.76 during this last 52-week period.
The ETF has a beta of 0.90 and standard deviation of 16.66% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco High Yield Equity Dividend Achievers ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $9.46 billion in assets, iShares Core S&P U.S. Value ETF has $15.48 billion. DFAT has an expense ratio of 0.28% and IUSV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
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.