Published Tue, 29 Sep 2020 01:27:24 -0400 on Seeking Alpha
Seeking AlphaETF Analysis | Financials KBWD: High-Risk, High-Return, High-Yield Financial ETF - 10.40% YieldSep. 29, 2020 1:27 AM ET|| About: Invesco Exchange-Traded Fund Trust II - Invesco KBW High Dividend Yield Financial ETF (KBWD)by: Juan de la HozJuan de la Hoz CEF/ETF Income LaboratoryCEF/ETF income and arbitrage strategies, 8%+ portfolio yieldsSummarySeveral readers and subscribers have expressed interest in financials, and with good reason.
These offer strong yields and cheap valuations, and could outperform as economic conditions stabilize.
KBWD focuses on high-yield financials, sports a 10.40% dividend, and could deliver double-digit capital gains in the coming years.
The Invesco KBW High Dividend Yield Financial ETF (KBWD) is an index ETF which invests in high dividend yield financials, but focusing on mortgage REITs and business development companies. These are trading at depressed prices and valuations, but with sky-high yields and discounts to book value, as the ongoing coronavirus outbreak hammers their revenues, asset values and dividends, and turns market sentiment bearish. As such, KBWD is a high-risk, high-reward investment opportunity. Expect double-digit capital gains and strong dividends if the economy recovers and market sentiment turns bullish, middling gains if the recovery stalls, strong losses if there is a reversal or sentiment turns bearish.
In my opinion, economic conditions will continue to stabilize so funds like KBWD will outperform, but risks are high and returns uncertain. KBWD is a good choice for only the more bullish and aggressive investors, most retirees or income investors should focus on safer, lower-yielding alternatives.
Sponsor: Invesco Underlying Index: KBW Nasdaq Financial Sector Dividend Yield Index Dividend Yield: 10.40% Management Fee: 0.35% Total Returns CAGR (Inception): 3.48% Fund Overview
KBWD is an index ETF which tracks the KBW Nasdaq Financial Sector Dividend Yield... Read more