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Is Invesco High Yield Equity Dividend Achievers ETF (PEY) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) is a smart beta exchange traded fund launched on 12/09/2004.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
PEY is managed by Invesco, and this fund has amassed over $978.27 million, which makes it one of the largest ETFs in the Style Box - All Cap Value. PEY seeks to match the performance of the NASDAQ US Dividend Achievers 50 Index before fees and expenses.
The NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends.
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.
Annual operating expenses for PEY are 0.53%, which makes it on par with most peer products in the space.
PEY's 12-month trailing dividend yield is 3.91%.
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.
This ETF has heaviest allocation in the Utilities sector - about 24.30% of the portfolio. Financials and Consumer Staples round out the top three.
When you look at individual holdings, Oneok Inc (OKE - Free Report) accounts for about 4.11% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and At&t Inc (T - Free Report) .
PEY's top 10 holdings account for about 30.97% of its total assets under management.
Performance and Risk
So far this year, PEY has gained about 24.49%, and was up about 26.10% in the last one year (as of 12/23/2021). During this past 52-week period, the fund has traded between $17.17 and $21.63.
PEY has a beta of 0.98 and standard deviation of 26.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco High Yield Equity Dividend Achievers ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $6.46 billion in assets, iShares Core S&P U.S. Value ETF has $11.68 billion. DFAT has an expense ratio of 0.34% and IUSV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
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 High Yield Equity Dividend Achievers ETF (PEY) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) is a smart beta exchange traded fund launched on 12/09/2004.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
PEY is managed by Invesco, and this fund has amassed over $978.27 million, which makes it one of the largest ETFs in the Style Box - All Cap Value. PEY seeks to match the performance of the NASDAQ US Dividend Achievers 50 Index before fees and expenses.
The NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends.
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.
Annual operating expenses for PEY are 0.53%, which makes it on par with most peer products in the space.
PEY's 12-month trailing dividend yield is 3.91%.
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.
This ETF has heaviest allocation in the Utilities sector - about 24.30% of the portfolio. Financials and Consumer Staples round out the top three.
When you look at individual holdings, Oneok Inc (OKE - Free Report) accounts for about 4.11% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and At&t Inc (T - Free Report) .
PEY's top 10 holdings account for about 30.97% of its total assets under management.
Performance and Risk
So far this year, PEY has gained about 24.49%, and was up about 26.10% in the last one year (as of 12/23/2021). During this past 52-week period, the fund has traded between $17.17 and $21.63.
PEY has a beta of 0.98 and standard deviation of 26.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco High Yield Equity Dividend Achievers ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $6.46 billion in assets, iShares Core S&P U.S. Value ETF has $11.68 billion. DFAT has an expense ratio of 0.34% and IUSV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
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.