Invesco High Yield Equity Dividend Achievers ETF (PEY) appears attractive on the surface with its high yield and "Dividend Achievers" branding, but deeper analysis reveals significant risks. The ETF's 74% turnover rate undermines its long-term, income-focused strategy, leading to underperformance and unpredictability. Many of PEY's top holdings show negative earnings growth, high debt and erratic cash flows — not exactly my idea of a great long-term investment or stable income generator.
A smart beta exchange traded fund, the Invesco High Yield Equity Dividend Achievers ETF (PEY) debuted on 12/09/2004, and offers broad exposure to the Style Box - All Cap Value category of the market.
PEY holds 50 high-yielding dividend stocks that have increased payments for at least ten consecutive years. Its expense ratio is 0.53% and the ETF has $1.07 billion in assets. I estimate PEY's dividend yield to be 5.03% at current prices, slightly better than its 4.75% trailing yield. The ETF also avoids REITs, so 100% of its distributions are QDI. PEY offers excellent value and trades at just 10.77x forward earnings. In addition, its 5.56% Index yield is well above the 4.22% four-year average, suggesting PEY's holdings are substantially undervalued.
The Invesco High Yield Equity Dividend Achievers ETF (PEY) made its debut on 12/09/2004, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
The Invesco High Yield Equity Dividend Achievers ETF (PEY) made its debut on 12/09/2004, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
Invesco High Yield Equity Dividend Achievers is best as a defensive fund with a 4.3% yield, suitable for sideways or declining markets due to its lack of tech exposure. PEY's top sectors are Utilities, Financials, and Consumer Staples, making up over 61% of assets, offering stability but limited growth. PEY has strong dividend growth, with a 10-year CAGR of 8.02%, but ordinary dividends may have less favorable tax consequences.
The Invesco High Yield Equity Dividend Achievers ETF (PEY) made its debut on 12/09/2004, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
The Invesco High Yield Equity Dividend Achievers ETF with a two-decade old history, serves as one of the more established dividend yielding products. PEY does have a couple of things going for it, such as a compelling yield and cheap valuations, but the more popular VYM still has the edge. PEY's sector and market-cap exposure is not ideal, and the risk-reward on the charts does not look promising now.
Inflation-beating gains and juicy yields are the name of the game.
With market pullbacks driven by factors like geopolitical tensions, central bank policies, and fluctuating jobless claims, many investors are left wondering where to allocate their funds. While the allure of stock picking, especially in trending areas like AI, Chinese stocks, or energy, can be strong, it doesn't suit every investor, particularly those looking for a more conservative, income-focused approach.
With market pullbacks driven by factors like geopolitical tensions, central bank policies, and fluctuating jobless claims, many investors are left wondering where to allocate their funds. While the allure of stock picking, especially in trending areas like AI, Chinese stocks, or energy, can be strong, it doesn't suit every investor, particularly those looking for a more conservative, income-focused approach.
A smart beta exchange traded fund, the Invesco High Yield Equity Dividend Achievers ETF (PEY) debuted on 12/09/2004, and offers broad exposure to the Style Box - All Cap Value category of the market.