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Is Invesco KBW Premium Yield Equity REIT ETF (KBWY) a Strong ETF Right Now?
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Launched on 12/02/2010, the Invesco KBW Premium Yield Equity REIT ETF (KBWY - Free Report) is a smart beta exchange traded fund offering broad exposure to the Real Estate 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
KBWY is managed by Invesco, and this fund has amassed over $248.05 million, which makes it one of the average sized ETFs in the Real Estate ETFs. This particular fund seeks to match the performance of the KBW Nasdaq Premium Yield Equity REIT Index before fees and expenses.
The KBW Nasdaq Premium Yield Equity REIT Index is a dividend weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the US.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
The fund has a 12-month trailing dividend yield of 9.67%.
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.
This ETF has heaviest allocation in the Real Estate sector - about 100% of the portfolio.
Looking at individual holdings, Innovative Industrial Properties Inc (IIPR) accounts for about 6.32% of total assets, followed by Community Healthcare Trust Inc (CHCT) and Brandywine Realty Trust (BDN).
KBWY's top 10 holdings account for about 46.6% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco KBW Premium Yield Equity REIT ETF has lost about -4.94% so far, and is down about -14.58% over the last 12 months (as of 12/01/2025). KBWY has traded between $14.41 $19.82 in this past 52-week period.
The fund has a beta of 1.12 and standard deviation of 22.17% for the trailing three-year period, which makes KBWY a medium risk choice in this particular space. With about 30 holdings, it has more concentrated exposure than peers .
Alternatives
Invesco KBW Premium Yield Equity REIT ETF is not a suitable option for investors seeking to outperform the Real Estate ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Real Estate Select Sector SPDR ETF (XLRE) tracks Real Estate Select Sector Index and the Schwab U.S. REIT ETF (SCHH) tracks Dow Jones U.S. Select REIT Index. Real Estate Select Sector SPDR ETF has $7.61 billion in assets, Schwab U.S. REIT ETF has $8.48 billion. XLRE has an expense ratio of 0.08% and SCHH changes 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Real Estate 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 KBW Premium Yield Equity REIT ETF (KBWY) a Strong ETF Right Now?
Launched on 12/02/2010, the Invesco KBW Premium Yield Equity REIT ETF (KBWY - Free Report) is a smart beta exchange traded fund offering broad exposure to the Real Estate 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
KBWY is managed by Invesco, and this fund has amassed over $248.05 million, which makes it one of the average sized ETFs in the Real Estate ETFs. This particular fund seeks to match the performance of the KBW Nasdaq Premium Yield Equity REIT Index before fees and expenses.
The KBW Nasdaq Premium Yield Equity REIT Index is a dividend weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the US.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
The fund has a 12-month trailing dividend yield of 9.67%.
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.
This ETF has heaviest allocation in the Real Estate sector - about 100% of the portfolio.
Looking at individual holdings, Innovative Industrial Properties Inc (IIPR) accounts for about 6.32% of total assets, followed by Community Healthcare Trust Inc (CHCT) and Brandywine Realty Trust (BDN).
KBWY's top 10 holdings account for about 46.6% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco KBW Premium Yield Equity REIT ETF has lost about -4.94% so far, and is down about -14.58% over the last 12 months (as of 12/01/2025). KBWY has traded between $14.41 $19.82 in this past 52-week period.
The fund has a beta of 1.12 and standard deviation of 22.17% for the trailing three-year period, which makes KBWY a medium risk choice in this particular space. With about 30 holdings, it has more concentrated exposure than peers .
Alternatives
Invesco KBW Premium Yield Equity REIT ETF is not a suitable option for investors seeking to outperform the Real Estate ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Real Estate Select Sector SPDR ETF (XLRE) tracks Real Estate Select Sector Index and the Schwab U.S. REIT ETF (SCHH) tracks Dow Jones U.S. Select REIT Index. Real Estate Select Sector SPDR ETF has $7.61 billion in assets, Schwab U.S. REIT ETF has $8.48 billion. XLRE has an expense ratio of 0.08% and SCHH changes 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Real Estate 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.