Invesco Fundamental High Yield® Corporate Bond ETF (PHB)

Overview

The Invesco Fundamental High Yield Corporate Bond ETF (NYSEARCA: PHB) seeks to track the performance of the RAFIu00ae Bonds US High Yield 1-10 Index. The ETF invests in high yield corporate bonds based on fundamental factors like sales, cash flow, dividends, and book value. It provides exposure to a diversified portfolio of U.S. high yield corporate bonds while emphasizing fundamental investment criteria.

Reputation and Reliability

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

Management Expertise

Invesco has a dedicated team of portfolio managers and analysts with significant experience in fixed income and high yield investing.

Goal

The ETF aims to track the investment results of the RAFIu00ae Bonds US High Yield 1-10 Index.

Investment Approach and Strategy

Strategy: The ETF aims to replicate the performance of a fundamentally weighted index of high yield corporate bonds.

Composition The ETF holds a portfolio of U.S. dollar-denominated high yield corporate bonds.

Market Share: PHB has a relatively small market share compared to the largest high yield bond ETFs.

Total Net Assets (AUM): 406700000

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 dominated by a few large players. PHB's fundamental weighting approach differentiates it, potentially offering value and downside protection, but it may underperform market-cap weighted competitors in strongly rallying markets. The larger ETFs benefit from greater liquidity and tighter spreads.

Historical Performance: Historical performance data is readily available from financial data providers. [Past performance is not indicative of future results.]

Benchmark Comparison: The ETF's performance should be compared to the RAFIu00ae Bonds US High Yield 1-10 Index. [Past performance is not indicative of future results.]

Expense Ratio: 0.5

Average Trading Volume

The ETF's average trading volume is moderate, which should provide sufficient liquidity for most investors.

Bid-Ask Spread

The ETF's bid-ask spread is typically reasonable, reflecting its decent liquidity.

Market Environment Factors

Economic growth, interest rate levels, credit spreads, and overall investor sentiment towards risk are key factors influencing the performance of PHB.

Growth Trajectory

PHB's growth is dependent on the attractiveness of its fundamental weighting strategy and the overall demand for high yield corporate bond exposure. Changes to the underlying index and holdings are disclosed periodically.

Competitive Edge

PHB's competitive edge lies in its fundamentally weighted approach, which seeks to select high yield bonds based on measures of financial health. This contrasts with market-cap weighted indexes. The fundamental approach may help mitigate downside risk and identify undervalued bonds. This may appeal to investors seeking a potentially more conservative approach to high yield investing.

Volatility

High yield bonds are inherently volatile, and PHB will likely exhibit greater volatility than investment-grade bond ETFs.

Market Risk

PHB is exposed to credit risk (the risk of default by issuers), interest rate risk (the risk that rising interest rates will reduce bond values), and liquidity risk (the risk of being unable to sell bonds quickly at a fair price).

Ideal Investor Profile

The ideal investor for PHB is one seeking high current income and willing to accept a moderate level of risk. Investors who believe in fundamental analysis and are looking for a potentially less volatile high yield investment may also find this ETF appealing.

Market Risk

PHB is suitable for long-term investors seeking income, but active traders may also find opportunities in it.

The Invesco Fundamental High Yield Corporate Bond ETF offers exposure to a diversified portfolio of U.S. high yield corporate bonds selected using a fundamental weighting strategy. This approach aims to mitigate downside risk and identify undervalued bonds. While high yield bonds inherently carry credit and interest rate risks, the ETF's fundamental approach may appeal to investors seeking a potentially more conservative high yield investment. Investors should carefully consider their risk tolerance and investment objectives before investing. PHB has a smaller AUM than the leaders in the high yield space and may have lower liquidity as a result.

Data Sources:

• Invesco Website
• ETF.com
• Bloomberg
• Morningstar

Disclaimers:

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