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Long-Short ETF (PHDG) Hits New 52-Week High

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For investors seeking momentum, Invesco S&P 500 Downside Hedged ETF (PHDG - Free Report) is probably on the radar now. The fund just hit a 52-week high and is up about 40.5% from its 52-week low price of $24.00/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

PHDG in Focus

This is an actively managed fund that seeks to achieve positive total returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns. The fund seeks to achieve its investment objective by using a quantitative, rules-based strategy that seeks to obtain returns that exceed the S&P 500 Dynamic VEQTOR Index. The index provides broad equity market exposure with an implied volatility hedge by dynamically allocating between equity, volatility and cash. The product charges 39 bps in annual fees (see: all the Long-Short ETFs here).

Why the Move?

The long-short corner of the broad ETF world has been an area to watch lately given that the coronavirus pandemic has resulted in a bloodbath in the stock market and raised the risk of global recession.  This is because the fast-spreading novel coronavirus has taken a toll on economic activities worldwide, leading to suspension of professional sports games, cancelation of major events, conferences and conventions, prohibition of mass gatherings, travel bans and half-empty restaurants. All these have resulted in deteriorating fundamentals.

More Gains Ahead?    

It seems that PHDG might remain strong given a higher weighted alpha of 29.60 but a higher risk as depicted by a 20-day volatility of 47.28%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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