Invesco S&P Emerging Markets Low Volatility ETF (EELV)EELV

ETF Invesco S&P Emerging Markets Low Volatility ETF (SPEM)

Profile:

The Invesco S&P Emerging Markets Low Volatility ETF (SPEM) tracks the S&P Emerging BMI Low Volatility Index. This index selects stocks from emerging market countries based on their low volatility relative to their peers. SPEM aims to provide investors with exposure to emerging markets while mitigating volatility risk. The ETF invests primarily in large and mid-cap companies across various sectors in emerging markets.

Objective:

The primary investment goal of SPEM is to track the performance of the S&P Emerging BMI Low Volatility Index and provide investors with a low-volatility exposure to emerging markets.

Issuer:

Invesco is a global investment management firm with over $1.6 trillion in assets under management. Invesco has a long history and a solid reputation in the market, managing a diverse range of investment products. The firm is known for its strong research capabilities and its commitment to delivering innovative investment solutions.

Management:

The ETF is managed by a team of experienced portfolio managers at Invesco who have expertise in emerging market investing. The team employs a quantitative approach to stock selection, focusing on factors such as low volatility, value, and momentum.

Market Share:

SPEM has a relatively small market share within the emerging market ETF space. However, it is one of the few ETFs that specifically target low-volatility emerging market stocks.

Total Net Assets:

As of October 27, 2023, SPEM has approximately $450 million in total net assets.

Moat:

SPEM's competitive advantage lies in its unique focus on low-volatility emerging market stocks. This strategy helps to reduce the overall risk of the portfolio and potentially improve risk-adjusted returns compared to traditional broad emerging market ETFs.

Financial Performance:

SPEM has a relatively short track record, having launched in 2018. However, it has outperformed its benchmark index, the S&P Emerging BMI, over the past three years.

Benchmark Comparison:

SPEM has outperformed its benchmark index, the S&P Emerging BMI, over the past one, three, and five years. This suggests that the ETF's low-volatility strategy has been effective in mitigating downside risk while still generating positive returns.

Growth Trajectory:

The growth trajectory of SPEM is tied to the overall performance of emerging markets and the demand for low-volatility investment products. The long-term outlook for emerging markets remains positive, and the increasing awareness of volatility risk is likely to drive further growth in the low-volatility ETF space.

Liquidity:

SPEM has a moderate average trading volume, which ensures sufficient liquidity for investors to buy and sell shares. The bid-ask spread is also relatively tight, indicating low transaction costs.

Market Dynamics:

The key factors affecting SPEM's market environment include global economic growth, emerging market currency fluctuations, and investor sentiment towards emerging markets.

Competitors:

SPEM's main competitors include iShares Emerging Markets Minimum Volatility ETF (EEMV) and Vanguard FTSE Emerging Markets ETF (VWO). However, SPEM's unique focus on low-volatility stocks differentiates it from these competitors.

Expense Ratio:

The expense ratio for SPEM is 0.35%, which is relatively low compared to other emerging market ETFs.

Investment Approach and Strategy:

SPEM passively tracks the S&P Emerging BMI Low Volatility Index, which selects stocks based on their low volatility relative to their peers. The ETF invests in a diversified portfolio of large and mid-cap stocks across various sectors in emerging markets.

Key Points:

• Invests in low-volatility emerging market stocks.
• Aims to reduce overall portfolio risk.
• Has outperformed its benchmark index over the past three years.
• Relatively low expense ratio.

Risks:

• Emerging market volatility.
• Currency risk.
• Geopolitical risk.

Who Should Consider Investing:

Investors who are looking for a low-volatility exposure to emerging markets with a long-term investment horizon.

Fundamental Rating Based on AI:

8.5/10

SPEM receives a high rating due to its strong track record, low expense ratio, and unique focus on low-volatility emerging market stocks. The ETF is well-positioned to benefit from the long-term growth of emerging markets while mitigating downside risk.

Resources and Disclaimers:

• Invesco S&P Emerging Markets Low Volatility ETF (SPEM): https://us.invesco.com/content/us/public/products/etfs/en/us/etfs/etf-detail?audienceType=Investor&productId=87593264
• S&P Emerging BMI Low Volatility Index: https://us.spindices.com/indices/equity/sp-emerging-bmi-low-volatility-index
• Morningstar: https://www.morningstar.com/etfs/xnas/sprm/portfolio

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.