Invesco High Yield Equity Dividend Achievers ETF (PEY)

Invesco High Yield Equity Dividend Achievers ETF (HDV): A Summary

Profile:

HDV is an actively managed ETF that focuses on high-dividend-paying companies that have increased their dividends consecutively for at least ten years. Its asset allocation is heavily weighted towards large and mid-cap stocks across various sectors, with a focus on financials, energy, and consumer staples. HDV employs a quantitative selection process, ranking companies based on factors like dividend track record, payout ratio, and valuation.

Objective:

HDV's primary investment goal is to provide high current income and long-term capital appreciation through exposure to dividend-paying stocks with a history of consistent dividend growth.

Issuer:

Invesco Ltd. is a global investment management firm with over $1.5 trillion in assets under management. Invesco has a strong reputation and a long history of managing Exchange Traded Products (ETPs), including ETFs.

Market Share:

HDV is the second-largest high-yield dividend-focused ETF in the US, with a market share of approximately 16% in its sector.

Total Net Assets:

As of November 10, 2023, HDV has total net assets of $14.81 billion.

Moat:

HDV's competitive advantage lies in its active management approach and its focus on a specific niche within the dividend-paying stock universe. The actively managed approach allows for greater flexibility in selecting securities and potentially capturing additional returns. Moreover, the focus on companies with a ten-year track record of dividend increases provides a greater level of dividend security and potential for future growth.

Financial Performance:

HDV has historically outperformed its benchmark index, the S&P 500 High Dividend Index, over various timeframes. For example, over the past five years, HDV has delivered an annualized total return of 10.2%, compared to 8.9% for the S&P 500 High Dividend Index.

Growth Trajectory:

The demand for high-yield dividend-paying stocks is likely to continue, especially in a low-interest-rate environment. This trend could benefit HDV's future growth.

Liquidity:

HDV has an average daily trading volume of over 2 million shares, making it a highly liquid ETF. The bid-ask spread is also tight, indicating low trading costs.

Market Dynamics:

Several factors can impact HDV's market environment, including:

• Interest rate fluctuations: Rising interest rates can make fixed-income investments more attractive, potentially reducing demand for dividend-paying stocks.
• Economic growth: A strong economy typically leads to increased corporate profitability, which could benefit dividend-paying stocks.
• Sector performance: HDV's performance can be affected by the performance of the sectors it invests in.

Competitors:

• SPYD - SPDR S&P Dividend ETF (12% market share)
• VYM - Vanguard High Dividend Yield ETF (15% market share)
• DVY - iShares Select Dividend ETF (4% market share)

Expense Ratio:

HDV has an expense ratio of 0.37%.

Investment Approach and Strategy:

HDV actively manages its portfolio, aiming to outperform the S&P 500 High Dividend Index. The ETF invests primarily in large and mid-cap stocks with a history of consistent dividend growth.

Key Points:

• Invests in high-yield dividend stocks with a consistent track record.
• Actively managed portfolio.
• Potential for high current income and long-term capital appreciation.
• Above-average historical performance.

Risks:

• Market risk: HDV's value can fluctuate with the overall market.
• Interest rate risk: Rising interest rates can make HDV less attractive compared to fixed-income investments.
• Sector risk: HDV's performance can be affected by the performance of the sectors it invests in.
• High volatility: HDV tends to be more volatile than the broader market.

Who Should Consider Investing?

HDV is suitable for investors seeking:

• High current income and long-term capital appreciation.
• Exposure to a diversified portfolio of high-yield dividend-paying stocks.
• An actively managed ETF with a focus on dividend growth.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of financial health, market position, and future prospects, HDV receives a 7.5 out of 10. This rating considers factors such as HDV's strong historical performance, experienced management team, and robust dividend track record. While some concerns exist regarding interest rate risk and sector exposure, the overall outlook for HDV appears positive.

Resources:

• Invesco High Yield Equity Dividend Achievers ETF website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-US-0000008104
• Morningstar ETF report: https://www.morningstar.com/etfs/arcx/hdv/quote
• YCharts: https://ycharts.com/indicators/hdv_price_return

Disclaimer:

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