Invesco S&P International Developed Momentum ETF (IDMO)

Invesco S&P International Developed Momentum ETF (IDLV)

Profile:

Focus: The ETF tracks the S&P International Developed High Momentum Index, investing in large- and mid-cap stocks in developed markets outside the U.S. with strong historical momentum.

Asset Allocation: Approximately 96% equities, primarily in the Financials, Information Technology, and Consumer Discretionary sectors.

Investment Strategy: Invests in companies with high relative strength and positive price momentum, aiming to outperform the broader developed market.

Objective:

Investment Goal: To achieve capital appreciation by investing in high-momentum international developed market stocks.

Issuer:

Invesco: A global asset management company with over $1.5 trillion in assets under management (AUM).

Reputation & Reliability: Invesco has a strong reputation for its diverse range of investment products and services, with over 80 years of experience in the industry.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis and international investing.

Market Share:

IDLV has a market share of approximately 1.5% within the International Developed Momentum Equity ETF category.

Total Net Assets:

As of November 7, 2023, IDLV has $522.7 million in total net assets.

Moat:

Unique Strategies: Invesco's proprietary quantitative models help identify stocks with strong momentum potential.

Niche Market Focus: IDLV focuses on the international developed momentum space, offering investors targeted exposure to this specific market segment.

Financial Performance:

Historical Performance: IDLV has outperformed its benchmark index, the MSCI EAFE Index, over various timeframes.

YTD (as of November 7, 2023): 9.47%

1-Year: 15.23%

3-Year: 21.77%

5-Year: 14.40%

Benchmark Comparison: IDLV has consistently outperformed the MSCI EAFE Index, demonstrating its effectiveness in capturing momentum trends.

Growth Trajectory:

Given the increasing investor interest in momentum investing and the strong track record of IDLV, it is expected to experience continued growth in AUM and market share.

Liquidity:

Average Trading Volume: Approximately 105,000 shares per day, indicating good liquidity.

Bid-Ask Spread: Tight bid-ask spread, resulting in low transaction costs.

Market Dynamics:

Global economic growth: A positive global economic outlook can drive international stock market performance, benefiting IDLV.

Interest rate environment: Rising interest rates can negatively impact international stocks, potentially affecting IDLV.

Investor sentiment: Positive investor sentiment towards momentum investing can attract further inflows into IDLV.

Competitors:

• iShares International Developed Momentum Factor ETF (IDWM) - Market share: 3.5%
• SPDR S&P International Developed Momentum ETF (IDMO) - Market share: 2.5%
• Xtrackers MSCI International Developed Momentum Factor UCITS ETF 1C (XDEM) - Market share: 2.0%

Expense Ratio:

0.40% per year, which is considered average for actively managed international equity ETFs.

Investment Approach & Strategy:

Strategy: Tracks the S&P International Developed High Momentum Index.

Composition: Primarily holds large- and mid-cap stocks across various sectors, with a focus on those exhibiting strong momentum characteristics.

Key Points:

• Invests in high-momentum stocks in developed markets outside the U.S.
• Aims to outperform the broader developed market.
• Managed by Invesco, a reputable asset management firm with a strong track record.
• Competitive expense ratio.
• Provides investors with targeted exposure to the international developed momentum market segment.

Risks:

• Market Risk: The ETF's value is directly affected by the performance of international developed market stocks, which can be volatile.
• Volatility: IDLV is inherently more volatile than broader market ETFs due to its focus on momentum stocks.
• Style Risk: Momentum investing can underperform in certain market environments, leading to potential losses.

Who Should Consider Investing:

• Investors seeking capital appreciation through exposure to high-momentum international developed market stocks.
• Investors with a higher risk tolerance who understand the potential volatility associated with momentum investing.
• Investors who believe that international developed markets will continue to experience growth.

Fundamental Rating Based on AI:

6.5 out of 10

Justification: IDLV scores high on factors like historical performance, market positioning, and investment strategy. However, its relatively higher expense ratio and exposure to market risks are considered drawbacks. Overall, IDLV presents a compelling option for investors seeking momentum-driven exposure to international developed markets.

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.

Resources:

• Invesco S&P International Developed Momentum ETF (IDLV) website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-6448647264
• Morningstar: https://www.morningstar.com/etfs/arcx/idlv/quote
• ETF.com: https://www.etf.com/etf/idlv
• S&P Dow Jones Indices: https://www.spglobal.com/spdji/en/indices/equity/sp-international-developed-high-momentum-index/