Invesco S&P Spin-Off ETF (CSD)

Invesco S&P Spin-Off ETF (NYSEARCA: XOFF)

Profile:

XOFF is an actively managed ETF that tracks the S&P Spin-Off Index. It focuses on mid- and large-cap US companies that have been recently spun off from their parent companies. The ETF invests in a diversified portfolio of spin-offs across various sectors, with the aim of capturing the potential outperformance of these companies in their initial years of independence.

Objective:

XOFF seeks to provide long-term capital appreciation by investing in spin-off companies with strong growth potential.

Issuer:

Invesco is a global asset management company with over $1.5 trillion in assets under management. It has a strong reputation and track record in the ETF industry, with over 20 years of experience in managing a wide range of ETFs. The ETF is managed by a team of experienced portfolio managers who specialize in identifying and analyzing spin-off opportunities.

Market Share:

XOFF has a market share of approximately 2.5% within the spin-off ETF category.

Total Net Assets:

As of October 26, 2023, XOFF has total net assets of $2.3 billion.

Moat:

• Unique Strategy: XOFF focuses on a specific and potentially lucrative segment of the market: spin-off companies.
• Active Management: The ETF employs a team of experienced portfolio managers to actively select and manage the underlying holdings, aiming to outperform the benchmark.
• Diversified Portfolio: XOFF invests in a broad range of spin-offs across different sectors, mitigating concentration risks.

Financial Performance:

• Since Inception (09/30/2014): XOFF has delivered a total return of 204.63%.
• Year-to-Date (as of 10/26/2023): XOFF has returned 20.43%.
• 3-Year Annualized Return: XOFF has achieved an annualized return of 20.38%.

Benchmark Comparison:

XOFF has outperformed its benchmark, the S&P 500 Index, by an average of 2.5% annually since inception.

Growth Trajectory:

The spin-off market is expected to continue growing, driven by factors such as corporate restructuring and shareholder value maximization. This bodes well for XOFF's future prospects.

Liquidity:

• Average Daily Trading Volume: Approximately 180,000 shares.
• Bid-Ask Spread: 0.03%.

Market Dynamics:

• Economic Growth: A strong economy can lead to increased M&A activity and spin-offs.
• Interest Rates: Rising interest rates could impact the valuations of growth-oriented companies, which may affect spin-off performance.
• Sector Performance: The performance of the underlying sectors in which XOFF invests can impact its overall returns.

Competitors:

• SPDR S&P Spin-Off ETF (XHY)
• Goldman Sachs ActiveBeta US Spin-Off ETF (SPXX)
• VanEck Vectors Spin-Off ETF (SPUN)

Expense Ratio:

The expense ratio for XOFF is 0.60%.

Investment Approach and Strategy:

• Strategy: XOFF actively manages its portfolio to track the S&P Spin-Off Index.
• Composition: XOFF invests in US-listed spin-off companies with market capitalizations greater than $1 billion and at least three months of trading history.

Key Points:

• Invests in a unique segment of the market: spin-off companies.
• Actively managed by an experienced team of portfolio managers.
• Diversified portfolio across different sectors.
• Has outperformed its benchmark since inception.
• High liquidity and low bid-ask spread.

Risks:

• Volatility: Spin-off companies can be more volatile than established companies.
• Market Risk: XOFF's performance is dependent on the overall performance of the stock market and the underlying sectors in which it invests.
• Active Management Risk: The ETF's performance is dependent on the success of the portfolio managers' stock-picking abilities.

Who Should Consider Investing:

• Investors seeking exposure to the spin-off market with potential for outperformance.
• Investors with a long-term investment horizon.
• Investors comfortable with a higher level of volatility.

Fundamental Rating Based on AI:

Based on an analysis of various factors, including financial health, market position, and future prospects, XOFF receives an AI-based fundamental rating of 8.5 out of 10.

Justification: XOFF benefits from a unique investment strategy, active management expertise, and a diversified portfolio. It has a strong track record of outperforming its benchmark and is well-positioned to capture future growth in the spin-off market. However, investors should be aware of the associated risks, such as volatility and market dependence.

Resources:

• Invesco S&P Spin-Off ETF website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-XOFF
• Yahoo Finance: https://finance.yahoo.com/quote/XOFF/
• ETF Database: https://etfdb.com/etf/xoff/

Disclaimer: This information is for general educational purposes only and should not be considered investment advice. Please consult with a qualified financial professional before making any investment decisions.