Is Invesco KBW Premium Yield Equity REIT ETF (KBWY) a Strong ETF Right Now?

The Invesco KBW Premium Yield Equity REIT ETF (KBWY) was launched on 12/02/2010, and is a smart beta exchange traded fund designed to offer broad exposure to the Real Estate ETFs category of the market.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.Fund Sponsor & IndexThe fund is managed by Invesco, and has been able to amass over $212.68 million, which makes it one of the average sized ETFs in the Real Estate ETFs. Before fees and expenses, KBWY seeks to match the performance of the KBW Nasdaq Premium Yield Equity REIT Index.The KBW Nasdaq Premium Yield Equity REIT Index is a dividend weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the US.Cost & Other ExpensesInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Operating expenses on an annual basis are 0.35% for KBWY, making it on par with most peer products in the space.KBWY's 12-month trailing dividend yield is 8.50%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Real Estate sector - about 100% of the portfolio.When you look at individual holdings, Global Net Lease Inc (GNL) accounts for about 7.98% of the fund's total assets, followed by Site Centers Corp (SITC) and Brandywine Realty Trust (BDN).Its top 10 holdings account for approximately 46.45% of KBWY's total assets under management.Performance and RiskThe ETF has lost about -5.12% so far this year and is up about 1.58% in the last one year (as of 03/24/2025). In the past 52-week period, it has traded between $16.62 and $21.54.The fund has a beta of 1.31 and standard deviation of 23.37% for the trailing three-year period, which makes KBWY a medium risk choice in this particular space. With about 32 holdings, it has more concentrated exposure than peers.AlternativesInvesco KBW Premium Yield Equity REIT ETF is a reasonable option for investors seeking to outperform the Real Estate ETFs segment of the market. However, there are other ETFs in the space which investors could consider.Real Estate Select Sector SPDR ETF (XLRE) tracks Real Estate Select Sector Index and the Schwab U.S. REIT ETF (SCHH) tracks Dow Jones U.S. Select REIT Index. Real Estate Select Sector SPDR ETF has $7.35 billion in assets, Schwab U.S. REIT ETF has $7.49 billion. XLRE has an expense ratio of 0.08% and SCHH charges 0.07%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Real Estate 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 KBW Premium Yield Equity REIT ETF (KBWY): ETF Research Reports Brandywine Realty Trust (BDN): Free Stock Analysis Report Global Net Lease, Inc. (GNL): Free Stock Analysis Report Real Estate Select Sector SPDR ETF (XLRE): ETF Research Reports Schwab U.S. REIT ETF (SCHH): ETF Research Reports SITE CENTERS CORP. (SITC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks