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Is Invesco Equal Weight 0-30 Year Treasury ETF (GOVI) a Strong ETF Right Now?
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Designed to provide broad exposure to the Government Bond ETFs category of the market, the Invesco Equal Weight 0-30 Year Treasury ETF (GOVI - Free Report) is a smart beta exchange traded fund launched on 10/11/2007.
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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
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
Because the fund has amassed over $629.89 million, this makes it one of the average sized ETFs in the Government Bond ETFs. GOVI is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the ICE 1-30 YR LADDERED MATURITY US TRSR ID.
The ICE 1-30 Year Laddered Maturity US Treasury Index is designed to track the performance of up to 30 U.S. Treasury Notes or Bonds representing the annual February maturity ladder across the yield curve.
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 0.15%, making it on par with most peer products in the space.
GOVI's 12-month trailing dividend yield is 3.42%.
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.
Taking into account individual holdings, United States Treasury Note/bond-4.00%-02-15-2034 accounts for about 5.01% of the fund's total assets, followed by United States Treasury Note/bond-4.50%-02-15-2036 and United States Treasury Note/bond-6.00%-02-15-2026.
Its top 10 holdings account for approximately 36.88% of GOVI's total assets under management.
Performance and Risk
Year-to-date, the Invesco Equal Weight 0-30 Year Treasury ETF has lost about -5.56% so far, and is up roughly 0% over the last 12 months (as of 05/02/2024). GOVI has traded between $25.78 and $29.11 in this past 52-week period.
GOVI has a beta of 0.12. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Equal Weight 0-30 Year Treasury ETF is not a suitable option for investors seeking to outperform the Government Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Long-Term Treasury ETF (VGLT - Free Report) tracks Bloomberg Barclays U.S. Long Government Float Adjusted Index and the iShares 20+ Year Treasury Bond ETF (TLT - Free Report) tracks ICE U.S. Treasury 20+ Year Bond Index. Vanguard Long-Term Treasury ETF has $11.50 billion in assets, iShares 20+ Year Treasury Bond ETF has $45.25 billion. VGLT has an expense ratio of 0.04% and TLT charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Government Bond 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 Equal Weight 0-30 Year Treasury ETF (GOVI) a Strong ETF Right Now?
Designed to provide broad exposure to the Government Bond ETFs category of the market, the Invesco Equal Weight 0-30 Year Treasury ETF (GOVI - Free Report) is a smart beta exchange traded fund launched on 10/11/2007.
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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
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
Because the fund has amassed over $629.89 million, this makes it one of the average sized ETFs in the Government Bond ETFs. GOVI is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the ICE 1-30 YR LADDERED MATURITY US TRSR ID.
The ICE 1-30 Year Laddered Maturity US Treasury Index is designed to track the performance of up to 30 U.S. Treasury Notes or Bonds representing the annual February maturity ladder across the yield curve.
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 0.15%, making it on par with most peer products in the space.
GOVI's 12-month trailing dividend yield is 3.42%.
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.
Taking into account individual holdings, United States Treasury Note/bond-4.00%-02-15-2034 accounts for about 5.01% of the fund's total assets, followed by United States Treasury Note/bond-4.50%-02-15-2036 and United States Treasury Note/bond-6.00%-02-15-2026.
Its top 10 holdings account for approximately 36.88% of GOVI's total assets under management.
Performance and Risk
Year-to-date, the Invesco Equal Weight 0-30 Year Treasury ETF has lost about -5.56% so far, and is up roughly 0% over the last 12 months (as of 05/02/2024). GOVI has traded between $25.78 and $29.11 in this past 52-week period.
GOVI has a beta of 0.12. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Equal Weight 0-30 Year Treasury ETF is not a suitable option for investors seeking to outperform the Government Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Long-Term Treasury ETF (VGLT - Free Report) tracks Bloomberg Barclays U.S. Long Government Float Adjusted Index and the iShares 20+ Year Treasury Bond ETF (TLT - Free Report) tracks ICE U.S. Treasury 20+ Year Bond Index. Vanguard Long-Term Treasury ETF has $11.50 billion in assets, iShares 20+ Year Treasury Bond ETF has $45.25 billion. VGLT has an expense ratio of 0.04% and TLT charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Government Bond 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.