Making its debut on 10/11/2007, smart beta exchange traded fund Invesco Equal Weight 0-30 Year Treasury ETF (GOVI) provides investors broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $880.3 million, which makes it one of the average sized ETFs in the Government Bond ETFs. GOVI, before fees and expenses, seeks to match the performance of the ICE 1-30 YR LADDERED MATURITY US TRSR ID.
The ICE 1-30 Year Laddered Maturity US Treasury Index is designed to track the performance of up to 30 U.S. Treasury Notes or Bonds representing the annual February maturity ladder across the yield curve.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.15% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.78%.
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.
When you look at individual holdings, United States Treasury Note/bond-1.88%-02-15-2032 (T) accounts for about 3.46% of the fund's total assets, followed by United States Treasury Note/bond-1.50%-02-15-2030 (T) and United States Treasury Note/bond-4.00%-02-15-2034 (T).
GOVI's top 10 holdings account for about 34.07% of its total assets under management.
Performance and Risk
So far this year, GOVI has lost about -0.11%, and is up roughly 5.56% in the last one year (as of 01/22/2026). During this past 52-week period, the fund has traded between $26.51 and $28.33.
The ETF has a beta of 0.36 and standard deviation of 8.82% for the trailing three-year period. With about 33 holdings, it has more concentrated exposure than peers .
Alternatives
Invesco Equal Weight 0-30 Year Treasury ETF is not a suitable option for investors seeking to outperform the Government Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
iShares 10-20 Year Treasury Bond ETF (TLH) tracks ICE U.S Treasury 10-20 Year Bond Index and the iShares 20+ Year Treasury Bond ETF (TLT) tracks ICE U.S. Treasury 20+ Year Bond Index. iShares 10-20 Year Treasury Bond ETF has $12.51 billion in assets, iShares 20+ Year Treasury Bond ETF has $46.29 billion. TLH has an expense ratio of 0.15% and TLT changes 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Government Bond ETFs
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 Equal Weight 0-30 Year Treasury ETF (GOVI): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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