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Is Invesco S&P International Developed Quality ETF (IDHQ) a Strong ETF Right Now?
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Making its debut on 06/13/2007, smart beta exchange traded fund Invesco S&P International Developed Quality ETF (IDHQ - Free Report) provides investors broad exposure to the Broad Developed World 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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, IDHQ has amassed assets over $235.14 million, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the S&P Quality Developed ex US LargeMidCap Index before fees and expenses.
The S&P Quality Developed ex US LargeMidCap Index tracks the performance of stocks in the S&P Developed Ex-US LargeMidCap Index that have the highest quality score, which is calculated based on three fundamental measures, return on equity, accruals ratio and financial leverage ratio.
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.
Operating expenses on an annual basis are 0.29% for IDHQ, making it on par with most peer products in the space.
IDHQ's 12-month trailing dividend yield is 2.49%.
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.
When you look at individual holdings, Asml Holding Nv (B929F46) accounts for about 5.15% of the fund's total assets, followed by Novo Nordisk A/s (BP6KMJ1) and Nestle Sa (NESN).
The top 10 holdings account for about 37.12% of total assets under management.
Performance and Risk
The ETF has added about 1.54% so far this year and is up roughly 12.06% in the last one year (as of 02/06/2024). In the past 52-week period, it has traded between $24.68 and $29.39.
IDHQ has a beta of 0.91 and standard deviation of 17.18% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 215 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P International Developed Quality ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $62.09 billion in assets, Vanguard FTSE Developed Markets ETF has $120.94 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World 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 S&P International Developed Quality ETF (IDHQ) a Strong ETF Right Now?
Making its debut on 06/13/2007, smart beta exchange traded fund Invesco S&P International Developed Quality ETF (IDHQ - Free Report) provides investors broad exposure to the Broad Developed World 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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, IDHQ has amassed assets over $235.14 million, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the S&P Quality Developed ex US LargeMidCap Index before fees and expenses.
The S&P Quality Developed ex US LargeMidCap Index tracks the performance of stocks in the S&P Developed Ex-US LargeMidCap Index that have the highest quality score, which is calculated based on three fundamental measures, return on equity, accruals ratio and financial leverage ratio.
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.
Operating expenses on an annual basis are 0.29% for IDHQ, making it on par with most peer products in the space.
IDHQ's 12-month trailing dividend yield is 2.49%.
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.
When you look at individual holdings, Asml Holding Nv (B929F46) accounts for about 5.15% of the fund's total assets, followed by Novo Nordisk A/s (BP6KMJ1) and Nestle Sa (NESN).
The top 10 holdings account for about 37.12% of total assets under management.
Performance and Risk
The ETF has added about 1.54% so far this year and is up roughly 12.06% in the last one year (as of 02/06/2024). In the past 52-week period, it has traded between $24.68 and $29.39.
IDHQ has a beta of 0.91 and standard deviation of 17.18% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 215 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P International Developed Quality ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $62.09 billion in assets, Vanguard FTSE Developed Markets ETF has $120.94 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World 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.