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Is Invesco KBW High Dividend Yield Financial ETF (KBWD) a Strong ETF Right Now?
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The Invesco KBW High Dividend Yield Financial ETF (KBWD - Free Report) made its debut on 12/02/2010, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $423.78 million, this makes it one of the average sized ETFs in the Financials ETFs. KBWD is managed by Invesco. This particular fund, before fees and expenses, seeks to match the performance of the KBW Nasdaq Financial Sector Dividend Yield Index.
The KBW Nasdaq Financial Sector Dividend Yield Index is a dividend yield weighted index seeking to reflect the performance of approximately 24 to 40 publicly listed financial companies engaged in the business of providing financial services and products, including banking, insurance and diversified financial services, in the US.
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 5.39% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 13.93%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
KBWD's heaviest allocation is in the Financials sector, which is about 100% of the portfolio.
When you look at individual holdings, Invesco Mortgage Capital Inc (IVR) accounts for about 5.23% of the fund's total assets, followed by Orchid Island Capital Inc (ORC) and Armour Residential Reit Inc (ARR).
Its top 10 holdings account for approximately 39.99% of KBWD's total assets under management.
Performance and Risk
The ETF has lost about -5.46% so far this year and is down about -4.07% in the last one year (as of 03/19/2026). In the past 52-week period, it has traded between $12.37 and $14.99
KBWD has a beta of 1.09 and standard deviation of 18.01% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 42 holdings, it has more concentrated exposure than peers .
Alternatives
Invesco KBW High Dividend Yield Financial ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Financials Index Fund ETF Shares (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the State Street Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials Index Fund ETF Shares has $12.08 billion in assets, State Street Financial Select Sector SPDR ETF has $45.93 billion. VFH has an expense ratio of 0.09% and XLF changes 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials 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 High Dividend Yield Financial ETF (KBWD) a Strong ETF Right Now?
The Invesco KBW High Dividend Yield Financial ETF (KBWD - Free Report) made its debut on 12/02/2010, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $423.78 million, this makes it one of the average sized ETFs in the Financials ETFs. KBWD is managed by Invesco. This particular fund, before fees and expenses, seeks to match the performance of the KBW Nasdaq Financial Sector Dividend Yield Index.
The KBW Nasdaq Financial Sector Dividend Yield Index is a dividend yield weighted index seeking to reflect the performance of approximately 24 to 40 publicly listed financial companies engaged in the business of providing financial services and products, including banking, insurance and diversified financial services, in the US.
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 5.39% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 13.93%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
KBWD's heaviest allocation is in the Financials sector, which is about 100% of the portfolio.
When you look at individual holdings, Invesco Mortgage Capital Inc (IVR) accounts for about 5.23% of the fund's total assets, followed by Orchid Island Capital Inc (ORC) and Armour Residential Reit Inc (ARR).
Its top 10 holdings account for approximately 39.99% of KBWD's total assets under management.
Performance and Risk
The ETF has lost about -5.46% so far this year and is down about -4.07% in the last one year (as of 03/19/2026). In the past 52-week period, it has traded between $12.37 and $14.99
KBWD has a beta of 1.09 and standard deviation of 18.01% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 42 holdings, it has more concentrated exposure than peers .
Alternatives
Invesco KBW High Dividend Yield Financial ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Financials Index Fund ETF Shares (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the State Street Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials Index Fund ETF Shares has $12.08 billion in assets, State Street Financial Select Sector SPDR ETF has $45.93 billion. VFH has an expense ratio of 0.09% and XLF changes 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials 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.