Making its debut on 12/09/2004, smart beta exchange traded fund Invesco High Yield Equity Dividend Achievers ETF (PEY) provides investors 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. PEY has been able to amass assets over $1.07 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.54% for PEY, making it on par with most peer products in the space.
PEY's 12-month trailing dividend yield is 4.46%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
PEY's heaviest allocation is in the Financials sector, which is about 21.7% of the portfolio. Its Utilities and Consumer Staples round out the top three.
Taking into account individual holdings, Lyondellbasell Industries Nv (LYB) accounts for about 4.18% of the fund's total assets, followed by Flowers Foods Inc (FLO) and Robert Half Inc (RHI).
The top 10 holdings account for about 31.33% of total assets under management.
Performance and Risk
Year-to-date, the Invesco High Yield Equity Dividend Achievers ETF has added roughly 8.91% so far, and is up roughly 4.98% over the last 12 months (as of 02/23/2026). PEY has traded between $18.68 $22.33 in this past 52-week period.
The ETF has a beta of 0.71 and standard deviation of 16.49% for the trailing three-year period, making it a medium risk choice in the 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 $8.85 billion in assets, iShares Core S&P U.S. Value ETF has $24.85 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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