Should You Invest in the Invesco KBW High Dividend Yield Financial ETF (KBWD)?

Launched on 12/02/2010, the Invesco KBW High Dividend Yield Financial ETF (KBWD) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Broad segment of the equity market.An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.Index DetailsThe fund is sponsored by Invesco. It has amassed assets over $429.49 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the equity market. KBWD seeks to match the performance of the KBW Nasdaq Financial Sector Dividend Yield Index before fees and expenses.The KBW Nasdaq Financial Sector Dividend Yield Index is a dividend yield weighted index seeking to reflect the performance of approximately 24 to 40 publicly listed financial companies engaged in the business of providing financial services and products, including banking, insurance and diversified financial services, in the US.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.Annual operating expenses for this ETF are 2.02%, making it one of the most expensive products in the space.It has a 12-month trailing dividend yield of 12%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.Looking at individual holdings, Invesco Mortgage Capital Inc (IVR) accounts for about 4.55% of total assets, followed by Orchid Island Capital Inc (ORC) and Armour Residential Reit Inc (ARR).The top 10 holdings account for about 36.46% of total assets under management.Performance and RiskThe ETF has gained about 4.88% and it's up approximately 10.48% so far this year and in the past one year (as of 02/03/2025), respectively. KBWD has traded between $14.31 and $16.26 during this last 52-week period.The ETF has a beta of 1.42 and standard deviation of 20.91% for the trailing three-year period, making it a medium risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.AlternativesInvesco KBW High Dividend Yield Financial ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. KBWD, then, is not a great choice for investors seeking exposure to the Financials ETFs segment of the market. Instead, there are better ETFs in the space to consider.Vanguard Financials ETF (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials ETF has $12.23 billion in assets, Financial Select Sector SPDR ETF has $53.78 billion. VFH has an expense ratio of 0.10% and XLF charges 0.09%.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 High Dividend Yield Financial ETF (KBWD): ETF Research Reports ARMOUR Residential REIT, Inc. (ARR): Free Stock Analysis Report INVESCO MORTGAGE CAPITAL INC (IVR): Free Stock Analysis Report Financial Select Sector SPDR ETF (XLF): ETF Research Reports Orchid Island Capital, Inc. (ORC): Free Stock Analysis Report Vanguard Financials ETF (VFH): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks