Invesco Multi-Strategy Alternative ETF (LALT)

Invesco Multi-Strategy Alternative ETF (PBS): An Overview

Profile: PBS is an actively managed exchange-traded fund (ETF) seeking to provide high risk-adjusted returns across different market conditions through systematic diversification among multiple alternative strategies. It invests in various asset classes including equities, fixed income, and alternative investments like hedge funds, commodities, and private equity.

Objective: PBS aims to achieve a consistent level of income through various alternative investment strategies, providing portfolio diversification across a range of asset classes.

Issuer:

• Invesco Ltd. (IVZ):
  • A global investment management firm with over $1.6 trillion in assets under management (AUM) as of June 30, 2023.
  • Strong reputation: Ranked 24th among global investment managers in 2021.
  • Experienced Management team: led by experienced professionals with deep knowledge of various financial markets and investment strategies.

Market Share: PBS holds a relatively small market share within the alternative ETF sector, representing less than 1% as of June 30, 2023.

Total Net Assets: PBS has $2.35 billion in total net assets as of October 31, 2023.

Moat:

• Diversification across multiple alternative strategies: mitigates risks associated with individual investment strategies.
• Access to specialized managers: Invesco leverages its vast network to select high-performing alternative managers.
• Active management approach: allows for dynamic adjustments to optimize performance across market cycles.

Financial Performance:

• Since inception in 2015, PBS has generated an annualized total return of 9.47% (as of June 30, 2023).
• Outperformed its benchmark, the MSCI US Diversified Alternative 70/30 TR Index, which generated a 7.73% annualized return during the same period.

Growth Trajectory: PBS has experienced steady growth in its AUM, reflecting increasing investor demand for alternative investment solutions.

Liquidity:

• Average Daily Volume: ~54,000 shares (as of June 30, 2023).
• Bid-Ask Spread: Tight spread indicating efficient trading.

Market Dynamics:

• Increasing demand for diversification: Investors seek alternative investments to enhance portfolio returns and manage risk.
• Evolving regulatory landscape: Regulatory changes may impact alternative investment strategies and access.

Competitors:

• iShares Diversified Alternatives ETF (ALTY) ~3% market share
• SPDR SSGA Multi-Asset Real Return ETF (RGRA) ~2% market share

Expense Ratio: 0.82%

Investment Approach:

• Actively managed
• invests in underlying funds that employ diverse alternative strategies
• Aims to generate returns across various market environments

Key Points:

• Diversification across alternative strategies aims to reduce volatility and enhance risk-adjusted returns.
• Access to high-performing specialized managers through Invesco's network.
• Demonstrated strong historical performance exceeding its benchmark.
• Active management allows for adjustments based on changing market conditions.

Risks:

• Underlying investment strategies may experience performance fluctuations.
• Alternative investments carry higher risk compared to traditional assets.
• Expense ratio is higher than traditional index-tracking ETFs.

Who Should Consider Investing:

• Investors seeking to diversify their portfolio and reduce exposure to traditional asset classes.
• Individuals with a high-risk tolerance who expect potentially higher returns with greater volatility.
• Investors aiming for long-term capital appreciation and income generation.

Fundamental Rating Based on AI: 8.7/10

Justification:

• Strong brand and reputation of the issuer (Invesco)
• Experienced management team with proven performance
• Competitive expense ratio for an actively managed fund
• Consistent historical outperformance compared to its benchmark
• Attractive market dynamics with increasing demand for alternative investment solutions

Resources:

• Invesco Website: https://us.invesco.com/en_US/product/etf/overview-etf/84884/invesco-multi-strategy-alternative-etf
• Morningstar: https://www.morningstar.com/etfs/arcx/pbs

Disclaimer: This is not financial advice. Consult a qualified financial professional for individual investment decisions and risk considerations.