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Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the Invesco KBW High Dividend Yield Financial ETF (KBWD), a passively managed exchange traded fund launched on 12/02/2010.
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.
Investor-friendly, sector ETFs provide many options 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 4, placing it in top 25%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $232.40 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.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 1.58%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 12.28%.
Sector Exposure and Top Holdings
While 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 98.10% of the portfolio.
Looking at individual holdings, Apollo Commercial Real Estate Finance Inc (ARI) accounts for about 4.84% of total assets, followed by Orchid Island Capital Inc (ORC) and Fs Kkr Capital Corp (FSK).
The top 10 holdings account for about 40.84% of total assets under management.
Performance and Risk
So far this year, KBWD has lost about -30.56%, and is down about -27.74% in the last one year (as of 11/08/2020). During this past 52-week period, the fund has traded between $9.28 and $22.94.