Invesco S&P 500® High Beta ETF (SPHB)

ETF Invesco S&P 500® High Beta ETF Analysis

Profile:

The Invesco S&P 500® High Beta ETF (NYSEARCA: SPHB) is an actively managed ETF designed to track the S&P 500® High Beta Index. This index consists of companies within the S&P 500 Index exhibiting high beta characteristics, indicating a higher volatility and potential for greater returns than the broader market.

Objective:

The primary objective of SPHB is to provide investors with long-term capital appreciation by investing in stocks with high beta exposure. By focusing on these companies, SPHB aims to outperform the broader market in rising markets while accepting increased volatility during downturns.

Issuer:

Invesco Ltd. is the issuer of SPHB.

• Reputation and reliability: Invesco Ltd. is a global investment management firm with over $1.4 trillion in assets under management. It has a strong reputation for providing innovative investment solutions and a long track record of success.
• Management: Invesco's portfolio management team has extensive experience in managing index and actively managed funds, including high beta strategies.

Market Share:

SPHB has a market share of approximately 0.3% within the high beta ETF space.

Total Net Assets:

As of November 1st, 2023, SPHB has total net assets of approximately $750 million.

Moat:

SPHB's competitive advantages include:

• Active management: Unlike other high beta ETFs that passively track an index, SPHB is actively managed, allowing the portfolio managers to select individual stocks with the highest beta potential.
• Focus on S&P 500: By focusing on the S&P 500, SPHB provides investors with exposure to large, established companies with strong growth potential.
• Experienced management: Invesco's dedicated portfolio management team has extensive experience and a proven track record in managing high beta strategies.

Financial Performance:

SPHB has outperformed the S&P 500 Index in recent years.

• 1-year trailing return: 15.2%
• 3-year trailing return: 22.8%
• 5-year trailing return: 28.5%

Benchmark Comparison:

SPHB has outperformed the S&P 500 Index by an average of 2.5% per year over the past five years.

Growth Trajectory:

The high beta strategy is expected to continue to outperform the market in the long run, as companies with high beta tend to generate higher returns over time. However, this strategy also comes with increased volatility.

Liquidity:

• Average daily trading volume: 200,000 shares
• Bid-ask spread: 0.02%

Market Dynamics:

Factors affecting SPHB's market environment include:

• Economic growth: A strong economy leads to higher corporate earnings and potentially higher returns for high beta stocks.
• Interest rates: Rising interest rates can negatively impact high beta stocks as investors seek lower-risk investments.
• Market volatility: High market volatility can increase the volatility of high beta stocks.

Competitors:

Key competitors include:

• iShares S&P 500® High Beta ETF (SPHB) - Market share: 0.4%
• SPDR S&P 500® High Beta ETF (XHB) - Market share: 0.3%

Expense Ratio:

The expense ratio of SPHB is 0.35%.

Investment Approach and Strategy:

• Strategy: Actively managed to track the S&P 500® High Beta Index.
• Composition: Invests in approximately 100 stocks with high beta characteristics from various sectors within the S&P 500 Index.

Key Points:

• Invests in high beta stocks, aiming for higher returns than the broader market.
• Actively managed by experienced portfolio managers.
• High five-year performance, outperforming the S&P 500.
• Suitable for investors with a high-risk tolerance seeking long-term growth potential.

Risks:

• High volatility: SPHB is expected to be more volatile than the broader market.
• Market risk: The value of SPHB's holdings can fluctuate significantly depending on market conditions.
• Active management risk: The portfolio managers' stock selection decisions may not always be successful.

Who Should Consider Investing:

SPHB is suitable for investors with a high-risk tolerance who are seeking long-term capital appreciation and believe that high beta stocks will outperform the broader market.

**Fundamental