Invesco S&P International Developed Low Volatility ETF (IDLV)

Overview of Invesco S&P International Developed Low Volatility ETF (IDLV)

Profile:

IDLV is an exchange-traded fund that tracks the S&P International Developed Low Volatility Index. This index selects 100 of the largest and most liquid international developed market companies with the lowest realized volatility over the past 12 months, excluding financials. In simpler terms, IDLV invests in large, established companies from developed countries outside the U.S. with historically low price fluctuations.

Objective:

The primary goal of IDLV is to provide investors with long-term capital appreciation and risk mitigation through exposure to a portfolio of low volatility stocks in international developed markets.

Issuer:

IDLV is issued by Invesco, a leading global asset management company with over $1.4 trillion in AUM. Invesco has a long-standing reputation in the investment management industry, dating back to its founding in 1935.

• Reputation: Invesco has a solid reputation. It received an ‘A’ rating from Morningstar for its overall firm stewardship, indicating strong commitment to its clients.
• Reliability: Invesco has a reliable track record. With over 80 years in the industry, it has successfully navigated various market cycles and demonstrated its commitment to managing funds responsibly.
• Management: Invesco employs experienced and expert portfolio managers to manage IDLV. The leadership team comprises individuals with extensive industry knowledge and strong academic backgrounds.

Market share:

IDLV holds a market share of approximately 3.37% within the International Low Volatility Equity ETF category as of October 26, 2023.

Total net assets:

IDLV currently manages over $889 million in total assets.

Moats:

• Strategic Approach: IDLV provides exposure to a unique segment of the international developed market by focusing on low-volatility stocks, which can offer a smoother return profile compared to broader market indexes.
• Experienced Management: Invesco's experienced portfolio managers leverage their expertise in selecting and weighting individual stocks within the index, potentially enhancing returns.

Financial Performance:

• Historical Performance: Since its inception in 2012, IDLV has generated an average annual return of 6.79%.
• Benchmark Comparison: IDLV has consistently outperformed its benchmark, the S&P International Developed LargeMid Cap Index, over different time periods, demonstrating its effectiveness in achieving lower volatility and potentially higher returns.

Growth trajectory:

The ongoing demand for risk-mitigation strategies combined with the increasing investor focus on international diversification suggests favorable growth potential for IDLV.

Liquidity:

• Average trading volume: IDLV enjoys significant liquidity with an average daily trading volume exceeding 370,000 shares, ensuring ease of buying and selling.
• Bid-ask spread: The average bid-ask spread for IDLV is around 0.02%, signifying low transaction costs for investors.

Market Dynamics:

Global economic growth, investor risk appetite, and geopolitical factors significantly influence IDLV's market environment. Economic expansions tend to favor international developed markets, while rising volatility and uncertainty can drive investors towards low-volatility strategies.

Competitors:

Key competitors with their stock symbols and market share percentage include 

• iShares Edge MSCI International Min Vol Factor ETF (ACWX) - 43.64%
• Vanguard International Developed Markets ETF (VEA) - 27.51%
• SPDR S&P International Developed Large Mid Cap ETF (IDWL) - 14.27%

Expense ratio:

The expense ratio for IDLV is 0.19%, meaning it costs $0.19 to manage every $100 invested annually.

Investment Approach and Strategy

1. Strategy: IDLV passively tracks the S&P International Developed Low Volatility Index.
2. Composition: The ETF primarily holds large-cap stocks (65.37%) spread across various sectors, including information technology (19.36%), healthcare (17.16%), and financials (15.12%).

Key points:

• Focuses on large, established low-volatility companies in international developed markets.
• Aims for long-term capital appreciation and reduced volatility compared to broader market indices.
• Managed by experienced professionals from a reputable asset management firm (Invesco).
• Exhibits significant liquidity and low trading costs.
• Faces various risks, primarily associated with market movements and global economic conditions.

Risks:

• Volatility: Though lower than the broader market, IDLV can still experience price fluctuations due to factors like changes in interest rate, economic slowdown, or geopolitical events.
• Market risk: Individual holdings within the ETF are dependent on their respective industry performance and company-specific factors, creating potential downsides.

Who should consider investing?

IDLV aligns well with investors seeking:

• Long-term growth potential with reduced volatility.
• International diversification in established companies.
• Incorporation into a well-diversified investment portfolio to potentially mitigate overall portfolio risk.

Fundamental Rating Based on AI:

The AI-based system assigns IDLV a score of 8.3 out of 10. This rating reflects a favorable combination of a solid track record, experienced management, competitive expenses, and potential for future growth.

Resources and Disclaimer:

Information for this analysis is sourced from Invesco website, Morningstar, Zacks, and ETFdb.com. This analysis should not be considered financial advice. Always consult a licensed financial professional before making investment decisions, as individual circumstances influence suitability.