We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco S&P International Developed Quality ETF (IDHQ) a Strong ETF Right Now?
Read MoreHide Full Article
Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the Invesco S&P International Developed Quality ETF (IDHQ - Free Report) is a smart beta exchange traded fund launched on 06/13/2007.
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.
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.
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
IDHQ is managed by Invesco, and this fund has amassed over $268.07 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. IDHQ, before fees and expenses, seeks to match the performance of the S&P Quality Developed ex US LargeMidCap Index.
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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.29%.
It has a 12-month trailing dividend yield of 2.23%.
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, Asml Holding Nv (B929F46) accounts for about 5.15% of total assets, followed by Novo Nordisk A/s (BP6KMJ1) and Nestle Sa (NESN).
IDHQ's top 10 holdings account for about 37.12% of its total assets under management.
Performance and Risk
The ETF has added about 6.12% so far this year and it's up approximately 16.28% in the last one year (as of 04/08/2024). In the past 52-week period, it has traded between $25.07 and $30.90.
The fund has a beta of 0.90 and standard deviation of 16.99% for the trailing three-year period, which makes IDHQ a low risk choice in this particular 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 $68.67 billion in assets, Vanguard FTSE Developed Markets ETF has $130.47 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco S&P International Developed Quality ETF (IDHQ) a Strong ETF Right Now?
Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the Invesco S&P International Developed Quality ETF (IDHQ - Free Report) is a smart beta exchange traded fund launched on 06/13/2007.
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.
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.
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
IDHQ is managed by Invesco, and this fund has amassed over $268.07 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. IDHQ, before fees and expenses, seeks to match the performance of the S&P Quality Developed ex US LargeMidCap Index.
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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.29%.
It has a 12-month trailing dividend yield of 2.23%.
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, Asml Holding Nv (B929F46) accounts for about 5.15% of total assets, followed by Novo Nordisk A/s (BP6KMJ1) and Nestle Sa (NESN).
IDHQ's top 10 holdings account for about 37.12% of its total assets under management.
Performance and Risk
The ETF has added about 6.12% so far this year and it's up approximately 16.28% in the last one year (as of 04/08/2024). In the past 52-week period, it has traded between $25.07 and $30.90.
The fund has a beta of 0.90 and standard deviation of 16.99% for the trailing three-year period, which makes IDHQ a low risk choice in this particular 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 $68.67 billion in assets, Vanguard FTSE Developed Markets ETF has $130.47 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.