Invesco Fundamental High Yield® Corporate Bond ETF (PHB)

ETF Invesco Fundamental High Yield® Corporate Bond ETF (PHB)

Profile:

ETF Invesco Fundamental High Yield® Corporate Bond ETF (PHB) seeks to track the performance of the ICE BofA Fundamental High Yield Index, focusing on US dollar-denominated corporate high-yield bonds. It invests in below-investment-grade corporate bonds, aiming for optimal risk-adjusted returns through a fundamentally-driven selection process.

Objective:

The primary objective of PHB is to provide investment returns that generally correspond to the price and yield performance of the underlying index, before fees and expenses. This makes it suitable for investors seeking exposure to high-yield corporate bonds with a focus on downside protection through fundamental analysis.

Issuer:

Invesco Ltd. (IVZ) is the issuer of PHB. It is a global investment management firm with over 80 years of experience and manages over $1.4 trillion in assets. Invesco has a strong reputation and is known for its innovative investment strategies and experienced management team.

Market Share:

PHB has a market share of approximately 0.6% in the High Yield Bond ETF category.

Total Net Assets:

As of November 8, 2023, PHB has total net assets of $2.6 billion.

Moat:

• Experienced Management Team: Invesco has a strong management team with deep expertise in fixed income investing.
• Fundamental Analysis Approach: Invesco's fundamental analysis process aims to identify undervalued bonds with strong creditworthiness, potentially enhancing risk-adjusted returns.
• Diversification: PHB holds a diverse portfolio of high-yield bonds across various sectors, reducing concentration risk.

Financial Performance:

PHB has a 3-year annualized return of 4.77%, outperforming its benchmark, the ICE BofA Fundamental High Yield Index, by 0.48%. However, it is important to note that past performance does not guarantee future results.

Growth Trajectory:

The high-yield bond market is expected to grow in the coming years due to factors such as low-interest rates and increased demand for income-generating assets. This could positively impact PHB's future growth.

Liquidity:

• Average Trading Volume: PHB has an average daily trading volume of approximately $20 million, ensuring good liquidity.
• Bid-Ask Spread: The bid-ask spread for PHB is typically around 0.05%, indicating low transaction costs.

Market Dynamics:

Factors affecting PHB include:

• Interest rate changes: Rising interest rates can negatively impact high-yield bonds.
• Economic growth: A strong economy can lead to higher corporate profits and improve credit quality.
• Market volatility: Increased market volatility can lead to higher price fluctuations for high-yield bonds.

Competitors:

• iShares iBoxx $ High Yield Corporate Bond ETF (HYG) - Market Share: 38.6%
• SPDR Bloomberg Barclays High Yield Bond ETF (JNK) - Market Share: 16.5%
• VanEck Vectors High-Yield Municipal Index ETF (HYD) - Market Share: 5.4%

Expense Ratio:

PHB has an expense ratio of 0.35%.

Investment Approach and Strategy:

• Strategy: PHB seeks to track the ICE BofA Fundamental High Yield Index, which uses a fundamental analysis approach to select bonds.
• Composition: The ETF primarily invests in below-investment-grade corporate bonds across various industries.

Key Points:

• Invesco's Fundamental High Yield® Corporate Bond ETF (PHB) offers exposure to high-yield corporate bonds with a focus on risk-adjusted returns through fundamental analysis.
• Invesco has a strong reputation and experienced management team.
• The ETF has a competitive expense ratio and decent liquidity.
• Key risks include interest rate changes, economic conditions, and market volatility.

Risks:

• Volatility: High-yield bonds are generally more volatile than investment-grade bonds.
• Market Risk: The value of the underlying bonds can be affected by various factors such as issuer creditworthiness, interest rate changes, and economic conditions.
• Call Risk: Issuers may call back their bonds before maturity, potentially reducing the ETF's return.

Who Should Consider Investing:

• Investors seeking exposure to high-yield corporate bonds with a focus on downside protection.
• Investors with a moderate risk tolerance and a long-term investment horizon.
• Investors seeking diversification within their fixed-income portfolio.

Fundamental Rating Based on AI:

Rating: 8.5

PHB receives a strong rating due to its experienced management team, fundamental analysis approach, competitive expense ratio, good liquidity, and solid long-term growth potential. However, it is important to consider the risks associated with high-yield bonds before investing.

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Always conduct your own research and consult with a financial advisor before making any investment decisions.

Resources:

• Invesco PHB Fact Sheet: https://us.invesco.com/content/dam/us/documents/us-fact-sheets/institutional/etfs/corp-hgh-yld-etf.pdf
• Invesco PHB Website: https://us.invesco.com/products/etf/etf-detail?audienceType=Investor&productId=PHB
• Morningstar PHB Profile: https://www.morningstar.com/etfs/arcx/phb/quote
• Bloomberg PHB Profile: https://www.bloomberg.com/quote/PHB:US
• ICE BofA Fundamental High Yield Index: https://us.spindices.com/indices/fixed-income/bofa-ml-fundamental-high-yield-index

This information is accurate as of November 8, 2023, and is subject to change.