Launched on 12/09/2004, the Invesco High Yield Equity Dividend Achievers ETF (PEY) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 & Index
The fund is managed by Invesco. PEY has been able to amass assets over $1.15 billion, making it one of the larger ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the NASDAQ US Dividend Achievers 50 Index.
The NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends.
Cost & Other Expenses
Investors 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.54%.
The fund has a 12-month trailing dividend yield of 4.23%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 21.6% of the portfolio. Consumer Staples and Industrials round out the top three.
Looking at individual holdings, Perrigo Co Plc (PRGO) accounts for about 4.18% of total assets, followed by Robert Half Inc (RHI) and Insperity Inc (NSP).
The top 10 holdings account for about 30.17% of total assets under management.
Performance and Risk
The ETF return is roughly 24.26% so far this year and it's up approximately 19.63% in the last one year (as of 09/02/2026). In the past 52-week period, it has traded between $19.60 and $25.26
The fund has a beta of 0.66 and standard deviation of 15.95% for the trailing three-year period, which makes PEY a medium risk choice in this particular space. With about 53 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco High Yield Equity Dividend Achievers ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Fidelity High Dividend ETF (FDVV) tracks Fidelity Core Dividend Index and the iShares Core S&P U.S. Value ETF (IUSV) tracks S&P 900 Value Index. Fidelity High Dividend ETF has $10.33 billion in assets, iShares Core S&P U.S. Value ETF has $27.71 billion. FDVV has an expense ratio of 0.15% and IUSV changes 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value
Bottom Line
To 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.
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Invesco High Yield Equity Dividend Achievers ETF (PEY): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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