Invesco Fundamental High Yield® Corporate Bond ETF (PHB)

Overview

The Invesco Fundamental High Yield Corporate Bond ETF (ticker: PHB) seeks investment results that correspond generally to the price and yield of the RAFI Bonds US High Yield 1-10 Index. The ETF invests in high-yield corporate bonds, selected and weighted based on fundamental factors rather than market capitalization, focusing on bonds with maturities between 1 and 10 years.

Reputation and Reliability

Invesco is a well-established global investment management firm with a long history and strong reputation in the ETF market.

Management Expertise

Invesco has extensive expertise in managing fixed-income investments and offers a wide range of ETFs across various asset classes.

Goal

To track the investment results of the RAFI Bonds US High Yield 1-10 Index.

Investment Approach and Strategy

Strategy: The ETF employs a full replication strategy to track the RAFI Bonds US High Yield 1-10 Index, which uses fundamental measures to select and weight high-yield bonds.

Composition The ETF primarily holds high-yield corporate bonds rated below investment grade, with maturities between 1 and 10 years.

Market Share: PHB has a moderate market share within the high yield corporate bond ETF segment.

Total Net Assets (AUM): 543252096

Key Competitors

• iShares iBoxx High Yield Corporate Bond ETF (HYG)
• SPDR Bloomberg High Yield Bond ETF (JNK)
• VanEck High Yield Muni ETF (HYD)

Competitive Landscape

The high-yield corporate bond ETF market is competitive, with a few large players dominating the landscape. PHB differentiates itself through its fundamentally weighted index, which may provide a performance edge over market-cap-weighted ETFs. However, it may have higher tracking error compared to market-cap-weighted ETFs due to the index methodology.

Historical Performance: Historical performance data can be found on the Invesco website and other financial data providers. Past performance does not guarantee future results.

Benchmark Comparison: The ETF's performance should be compared to the RAFI Bonds US High Yield 1-10 Index to assess its tracking efficiency.

Expense Ratio: 0.5

Average Trading Volume

The average trading volume of PHB indicates moderate liquidity, allowing investors to buy and sell shares without significantly impacting the price.

Bid-Ask Spread

The bid-ask spread of PHB is generally tight, reflecting reasonable trading costs for investors.

Market Environment Factors

Economic growth, interest rate movements, credit spreads, and investor sentiment influence the performance of high-yield corporate bonds and, consequently, PHB.

Growth Trajectory

Growth depends on investor demand for high-yield fixed-income investments and Invesco's ability to attract and retain assets in PHB.

Competitive Edge

PHBu2019s fundamental weighting methodology differentiates it from market-cap-weighted peers and aims to improve risk-adjusted returns. The RAFI index selects and weights bonds based on fundamental factors like cash flow, sales, and dividends. This approach may offer enhanced diversification and potentially avoid overexposure to overvalued or indebted companies. This strategic approach could lead to better long-term performance compared to standard high-yield ETFs.

Volatility

High-yield corporate bonds are inherently more volatile than investment-grade bonds, and PHB reflects this volatility.

Market Risk

PHB is subject to credit risk (risk of default by issuers) and interest rate risk (risk of declining bond values due to rising interest rates).

Ideal Investor Profile

PHB is suited for investors seeking income from high-yield corporate bonds and willing to accept higher credit risk in exchange for potentially higher yields.

Market Risk

PHB is suitable for investors with a moderate to high-risk tolerance, seeking income diversification, and with a time horizon of at least a few years.

The Invesco Fundamental High Yield Corporate Bond ETF (PHB) offers exposure to high-yield corporate bonds using a fundamental weighting methodology. This approach aims to improve risk-adjusted returns compared to market-cap-weighted ETFs. While it offers potentially higher yields, investors should be aware of the associated credit and interest rate risks. PHB is suitable for income-seeking investors with a moderate to high-risk tolerance and a longer-term investment horizon. The fund's performance depends on the overall health of the economy and the high yield credit market.

• HYG
• JNK
• SDHY
• HYS

Data Sources:

• Invesco Official Website
• SEC Filings
• FactSet
• Morningstar

Disclaimers:

The information provided is for informational purposes only and should not be construed as investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions.