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Is Invesco S&P International Developed Quality ETF (IDHQ) a Strong ETF Right Now?
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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Invesco. It has amassed assets over $310.64 million, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund 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
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 0.29% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.15%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Asml Holding Nv (ASML - Free Report) accounts for about 6.24% of total assets, followed by Novo Nordisk A/s (NOVOB) and Nestle Sa (NESN).
The top 10 holdings account for about 37.37% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P International Developed Quality ETF return is roughly 9.97% so far, and it's up approximately 20.08% over the last 12 months (as of 06/10/2024). IDHQ has traded between $25.07 and $31.40 in this past 52-week period.
IDHQ has a beta of 0.92 and standard deviation of 16.86% for the trailing three-year period, which makes the fund a low risk choice in the 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 $72.14 billion in assets, Vanguard FTSE Developed Markets ETF has $134.07 billion. VXUS has an expense ratio of 0.08% 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.
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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Invesco. It has amassed assets over $310.64 million, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund 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
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 0.29% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.15%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Asml Holding Nv (ASML - Free Report) accounts for about 6.24% of total assets, followed by Novo Nordisk A/s (NOVOB) and Nestle Sa (NESN).
The top 10 holdings account for about 37.37% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P International Developed Quality ETF return is roughly 9.97% so far, and it's up approximately 20.08% over the last 12 months (as of 06/10/2024). IDHQ has traded between $25.07 and $31.40 in this past 52-week period.
IDHQ has a beta of 0.92 and standard deviation of 16.86% for the trailing three-year period, which makes the fund a low risk choice in the 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 $72.14 billion in assets, Vanguard FTSE Developed Markets ETF has $134.07 billion. VXUS has an expense ratio of 0.08% 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.