Invesco specializes in equally weighted indices. Invesco offers a significant mix of mutual funds and exchange traded funds. The asset manager is …
Invesco specializes in equally weighted indices.
Invesco offers a wide range of mutual funds and exchange traded funds. The asset manager is widely known for his strength in international investment and fixed income offerings, particularly the BulletShares series of bond funds he acquired when buying OppenheimerFunds in 2019. Craig Bolanos , CEO of Wealth Management Group, says the company’s equal-weighted index fund offering makes it unique for investors looking for an alternative to market-capitalization-weighted indices. Most index funds are weighted by market capitalization, which means that the larger stocks make up the largest percentage of the index. An equally weighted fund means that no single stock dominates the index. âEven weight indices deserve a place at the table,â Bolanos said. Here are seven Invesco mutual funds and ETFs to consider.
Invesco S&P 500 Equal Weight ETF (Symbol: RER)
Bolanos prefers the RSP to a market capitalization weighted S&P 500 index. The RSP gives investors greater exposure to small-cap companies – companies that historically experience more sustainable growth, according to Bolanos. Equal weight indices tend to outperform market capitalization weighted indices, in part because of rebalancing, he says. Equally weighted funds may also offer better risk-adjusted returns because, during market disruptions, the more weighted stocks generally dragged the rest of the index down. In today’s market environment, where tech stocks like Microsoft Corp. (MSFT) dominate the S&P 500, “investors would be well served to consider RSPs in their portfolios from a risk management perspective,” he said.
Invesco S&P 500 Pure Value ETF (VPN)
Investors looking for more value-oriented ETFs can turn to the VPN, which Todd Rosenbluth, head of ETF and mutual fund research at CFRA Research, says has a more focused value approach. than the others Value-driven ETFs. The Invesco ETF uses the S&P 500 as a starting point and looks for companies that have ârelatively attractiveâ book value / price, earnings / price and sales / price metrics. The fund focuses on just 121 companies with the most important value characteristics, rather than including companies with a mix of value and growth. The fund also has a larger weighting in sectors such as financials and energy compared to similar value-oriented ETFs. The fund has a relatively low expense ratio of 0.35%, or $ 35 for every $ 10,000 invested, and is up about 48% year over year, compared to 32% for the S&P 500 as a whole. âWe believe the fund is well positioned for continued success over the next nine months,â said Rosenbluth.
Invesco Discovery Mid-Cap Growth Fund (OEGAX)
Many investors lack exposure to midcaps, and Steve Azoury, financial advisor and owner of Azoury Financial, has long been a fan of OEGAX for its strong long-term performance. Since the start of the year, it has increased by around 20%, placing it in the top quartile of its peers. OEGAX beats its category and index over periods of three, five and 10 years. The two main categories of the fund are technology and healthcare, two sectors which support performance. Technology company Monolithic Power Systems Inc. (MPWR) and Idexx Laboratories Inc. (IDXX) are two of the fund’s largest holdings. The fund has seasoned managers, and one of them has worked with OEGAX since 2007. âIt’s a well-diversified and well-managed fund,â says Azoury. âThe performance has been very, very consistent. The fund’s expense ratio of 1.05% is also considered relatively low among comparable mutual funds.
Invesco S&P 500 Equal Weight Healthcare ETF (RYH)
Numerous health care stocks in the S&P 500 index are attractive, says Rosenbluth. The research firm strongly rates several mega-capitalization healthcare stocks such as Johnson & Johnson (JNJ) and Pfizer Inc. (PFE) in addition to Cardinal Health Inc. (CAH) and Universal Health Services Inc. (UHS). These four names are weighted equally in RYH, which means that the ETF holds approximately the same amount of assets in each of these four names. The ETF also outperforms the larger and better known Health Care Select Sector (SPDR).XLV) AND F. The Invesco fund was supported by a higher weighting of sub-sectors such as healthcare facilities and supplies, which outperformed this year. RYH is up about 32% year on year.
Invesco S&P Ultra Dividend Income ETF (RDIV)
we Dividend ETF were popular in the first half of the year, with investors seeking income through the equity market. One of the most notable was the RDIV. Since the start of the year, the fund is up around 18% and offers a return of 4.7%. Rosenbluth likes RDIV for its “modest risk profile and high reward potential”. The fund uses several steps to compile the 60-name index, including eliminating companies with the highest dividend yields overall and the highest dividend payout ratios in each industry. Next, the ETF weights the remaining highest dividend payers based on income earned and then rebalances quarterly. The fund is based on the S&P 900 Dividend Revenue-Weighted Index.
Invesco BulletShares 2022 High Yield Corporate Bond ETF (BSJM)
Low interest rates can make it more difficult for income-seeking investors to find returns, especially in short-term funds. Daniel Milan, financial advisor and managing partner of Cornerstone Financial Services, says he uses BSJM as a short-term, high-yield option. âThe current payout rate of 3.06% is decent for a one-year hold,â he says. Invesco’s BulletShares offering is a series of fixed income funds with defined maturities. Each fund holds securities that mature in the year defined by the fund, so that particular fund’s bonds mature in 2022. By the end of December 2022, the fund’s position will be in cash, which will be distributed to fund shareholders. While the short-term return is good, he cautions income investors from trying to achieve the return. âBSJM isn’t bad in this environment, but when you extend the terms to 2023, 2024, or 2025, you don’t get a lot of payout increase to make it worth it,â he says. he.
Invesco National AMT-Free Muni Bond ETF (PZA)
Investors looking for income may want to look to PZA, a municipal-bond ETF, says Josh Simpson, vice president of operations and investment advisor at Lake Advisory Group. His company uses this ETF in some accounts as a replacement for holding individual bonds due to low interest rates. âWe know that rates are going to have to start rising over the next year or so. PZA is a good game because it doesn’t lock in a client’s money for five years or more, during which time they may miss the opportunity to buy higher interest rate bonds, âsays Simpson. . Bonds held in PZA are insured against default and municipal bonds are exempt from federal income tax. The current yield is 2.34% and the annual expense ratio is 0.28%.
Here are seven Invesco mutual funds and ETFs to consider:
– Invesco S&P 500 Equal Weight ETF (RER)
– Invesco S&P 500 Pure Value ETF (VPN)
– Invesco Discovery Mid-Cap Growth Fund (OEGAX)
– Invesco S&P 500 Equal Weight Healthcare ETF (RYH)
– Invesco S&P Ultra Dividend Revenue ETF (RDIV)
– Invesco BulletShares 2022 High Yield Corporate Bond ETF (BSJM)
– Invesco National AMT-Free Muni Bond ETF (PZA)
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Update 09/17/21: This story was posted at an earlier date and has been updated with new information.