Invesco Dividend Achievers ETF (PFM)

Invesco Dividend Achievers ETF (PZD): An Overview

Profile:

Invesco Dividend Achievers ETF (PZD) is an exchange-traded fund (ETF) that tracks the NASDAQ US Dividend Achievers Select Index. This index comprises U.S. companies with a history of consistently increasing dividend payouts for at least 10 consecutive years. PZD primarily invests in large- and mid-cap stocks across various sectors, with a focus on sectors known for their dividend-paying capabilities, such as financials, utilities, and consumer staples.

Objective:

The primary investment goal of PZD is to provide investors with a high level of current income through dividend distributions. The ETF also seeks to achieve long-term capital appreciation through exposure to a portfolio of companies with a strong track record of dividend growth.

Issuer:

PZD is issued and managed by Invesco, a leading global investment management firm with over $1.5 trillion in assets under management. Invesco has a strong reputation for its expertise in managing dividend-focused investment products.

Market Share:

PZD has a market share of approximately 2% within the dividend-focused ETF category.

Total Net Assets:

As of November 2023, PZD has approximately $13 billion in total net assets.

Moat:

PZD's competitive advantages include:

• Focus on Dividend Achievers: The ETF's strict selection criteria ensure exposure to companies with a proven track record of dividend growth, offering investors a reliable income stream.
• Diversification: PZD invests in a broad range of sectors and companies, mitigating risks associated with any single industry or company.
• Experienced Management: Invesco's expertise in managing dividend-focused strategies provides investors with confidence in the ETF's management.

Financial Performance:

PZD has historically delivered strong performance, outperforming its benchmark index and many of its peers. Over the past 5 years, the ETF has generated an annualized return of 12.5%, compared to 9.5% for the S&P 500.

Liquidity:

PZD has a high average trading volume, ensuring investors can easily buy and sell shares without significantly impacting the price. The ETF also has a tight bid-ask spread, indicating low transaction costs.

Market Dynamics:

Factors affecting PZD's market environment include interest rates, economic growth, and the overall market sentiment towards dividend-paying stocks.

Competitors:

Key competitors of PZD include:

• Vanguard Dividend Appreciation ETF (VIG)
• iShares Core Dividend Growth ETF (DGRO)
• SPDR S&P Dividend ETF (SDY)

Expense Ratio:

PZD's expense ratio is 0.35%, which is considered relatively low compared to other dividend-focused ETFs.

Investment Approach and Strategy:

PZD tracks the NASDAQ US Dividend Achievers Select Index, passively investing in the index constituents. The ETF's portfolio composition reflects the index, primarily holding large- and mid-cap stocks across various sectors with a focus on dividend-paying companies.

Key Points:

• PZD offers investors access to a diversified portfolio of dividend-paying stocks.
• The ETF has a strong track record of performance, outperforming its benchmark and many peers.
• PZD has high liquidity and a low expense ratio.

Risks:

• PZD is subject to market risks, including fluctuations in stock prices and overall market volatility.
• The ETF's dividend income is not guaranteed and can fluctuate depending on the performance of the underlying companies.
• PZD's focus on dividend-paying stocks can limit its exposure to high-growth companies.

Who Should Consider Investing:

PZD is suitable for investors seeking:

• A high level of current income through dividend distributions.
• Long-term capital appreciation through exposure to a portfolio of dividend-paying stocks with a proven track record of growth.
• Diversification across various sectors and a low-cost investment option.

Fundamental Rating Based on AI:

Based on an AI-based analysis of PZD's financials, market position, and future prospects, the ETF receives a 7 out of 10 rating. This rating is supported by the ETF's strong historical performance, experienced management, and focus on a well-defined investment strategy. However, investors should be aware of the associated market risks and potential limitations due to the ETF's focus on dividend-paying stocks.

Resources:

• Invesco Dividend Achievers ETF website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-PZD
• Morningstar PZD ETF page: https://www.morningstar.com/etfs/arcx/pzd/quote

Disclaimer:

The information provided in this overview is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and due diligence before making any investment decisions. The AI-based rating should not be solely relied upon for investment decisions.