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Is Invesco KBW Premium Yield Equity REIT ETF (KBWY) a Strong ETF Right Now?
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Designed to provide broad exposure to the Real Estate ETFs category of the market, the Invesco KBW Premium Yield Equity REIT ETF (KBWY - Free Report) is a smart beta exchange traded fund launched on 12/02/2010.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Because the fund has amassed over $248.79 million, this makes it one of the average sized ETFs in the Real Estate ETFs. KBWY is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the KBW Nasdaq Premium Yield Equity REIT Index.
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
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 this ETF are 0.35%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.69%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Real Estate sector.
When you look at individual holdings, Uniti Group Inc (UNIT - Free Report) accounts for about 9.59% of the fund's total assets, followed by Global Net Lease Inc (GNL - Free Report) and Service Properties Trust (SVC - Free Report) .
Its top 10 holdings account for approximately 47.19% of KBWY's total assets under management.
Performance and Risk
Year-to-date, the Invesco KBW Premium Yield Equity REIT ETF return is roughly 11.97% so far, and is up about 23.16% over the last 12 months (as of 09/20/2024). KBWY has traded between $16.02 and $21.54 in this past 52-week period.
The fund has a beta of 1.28 and standard deviation of 23.56% for the trailing three-year period, which makes KBWY a medium risk choice in this particular space. With about 31 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.
Schwab U.S. REIT ETF (SCHH - Free Report) tracks Dow Jones U.S. Select REIT Index and the Real Estate Select Sector SPDR ETF (XLRE - Free Report) tracks Real Estate Select Sector Index. Schwab U.S. REIT ETF has $7.93 billion in assets, Real Estate Select Sector SPDR ETF has $8 billion. SCHH has an expense ratio of 0.07% and XLRE charges 0.09%.
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?
Designed to provide broad exposure to the Real Estate ETFs category of the market, the Invesco KBW Premium Yield Equity REIT ETF (KBWY - Free Report) is a smart beta exchange traded fund launched on 12/02/2010.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Because the fund has amassed over $248.79 million, this makes it one of the average sized ETFs in the Real Estate ETFs. KBWY is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the KBW Nasdaq Premium Yield Equity REIT Index.
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
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 this ETF are 0.35%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.69%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Real Estate sector.
When you look at individual holdings, Uniti Group Inc (UNIT - Free Report) accounts for about 9.59% of the fund's total assets, followed by Global Net Lease Inc (GNL - Free Report) and Service Properties Trust (SVC - Free Report) .
Its top 10 holdings account for approximately 47.19% of KBWY's total assets under management.
Performance and Risk
Year-to-date, the Invesco KBW Premium Yield Equity REIT ETF return is roughly 11.97% so far, and is up about 23.16% over the last 12 months (as of 09/20/2024). KBWY has traded between $16.02 and $21.54 in this past 52-week period.
The fund has a beta of 1.28 and standard deviation of 23.56% for the trailing three-year period, which makes KBWY a medium risk choice in this particular space. With about 31 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.
Schwab U.S. REIT ETF (SCHH - Free Report) tracks Dow Jones U.S. Select REIT Index and the Real Estate Select Sector SPDR ETF (XLRE - Free Report) tracks Real Estate Select Sector Index. Schwab U.S. REIT ETF has $7.93 billion in assets, Real Estate Select Sector SPDR ETF has $8 billion. SCHH has an expense ratio of 0.07% and XLRE charges 0.09%.
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.