Is Invesco Fundamental High Yield Corporate Bond ETF (PHB) a Strong ETF Right Now?

The Invesco Fundamental High Yield Corporate Bond ETF (PHB) made its debut on 11/15/2007, and is a smart beta exchange traded fund that provides broad exposure to the High-Yield/Junk Bond ETFs category of the market.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexThe fund is managed by Invesco. PHB has been able to amass assets over $328.80 million, making it one of the average sized ETFs in the High-Yield/Junk Bond ETFs. PHB, before fees and expenses, seeks to match the performance of the RAFI Bonds US High Yield 1-10 Index.The RAFI Bonds US High Yield 1-10 Index is comprised of US dollar-denominated bonds that are registered with the SEC or that are Rule 144A securities that provide for registration rights and whose issuers are public companies listed on a major US stock exchange.Cost & Other ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.Annual operating expenses for PHB are 0.50%, which makes it on par with most peer products in the space.PHB's 12-month trailing dividend yield is 5.89%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.Taking into account individual holdings, Synchrony Financial-7.25%-02-02-2033 (87165BAU7) accounts for about 1.22% of the fund's total assets, followed by United Airlines Inc-4.62%-04-15-2029 (90932LAH0) and Windsor Holdings Iii Llc-8.50%-06-15-2030 (97360AAA5).The top 10 holdings account for about 9.5% of total assets under management.Performance and RiskYear-to-date, the Invesco Fundamental High Yield Corporate Bond ETF return is roughly 1.41% so far, and was up about 5.81% over the last 12 months (as of 03/27/2025). PHB has traded between $17.74 and $18.61 in this past 52-week period.PHB has a beta of 0.47 and standard deviation of 7.08% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 261 holdings, it effectively diversifies company-specific risk.AlternativesInvesco Fundamental High Yield Corporate Bond ETF is not a suitable option for investors seeking to outperform the High-Yield/Junk Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.IShares iBoxx $ High Yield Corporate Bond ETF (HYG) tracks Markit iBoxx USD Liquid High Yield Index and the iShares Broad USD High Yield Corporate Bond ETF (USHY) tracks BofA Merrill Lynch U.S. High Yield Constrained Index. IShares iBoxx $ High Yield Corporate Bond ETF has $15.56 billion in assets, iShares Broad USD High Yield Corporate Bond ETF has $19.92 billion. HYG has an expense ratio of 0.49% and USHY charges 0.08%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the High-Yield/Junk Bond ETFs.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco Fundamental High Yield Corporate Bond ETF (PHB): ETF Research Reports iShares iBoxx $ High Yield Corporate Bond ETF (HYG): ETF Research Reports iShares Broad USD High Yield Corporate Bond ETF (USHY): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks