Increased confidence in Invesco S&P Spin-Off ETF's prospects relative to its Morningstar Category peers leads to an upgrade in this strategy's Morningstar Medalist Rating to Neutral from Negative. The portfolio maintains a sizable cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy receives a Low Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in quality exposure and an overweight in volatility exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

GE Vernova Inc.

Constellation Energy Corp

Veralto Corp

GE HealthCare Technologies Inc

Crane Holdings Co

Kyndryl Holdings

DT Midstream

GXO Logistics

ESAB Corp

Vontier Corporation

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Invesco S&P Spin-Off ETF earns a Low Process Pillar rating. The predominant detractor from the rating is the fund's mediocre long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year retention rate of 68% also weakens the process. The parent firm's disappointing risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.8 stars, detracts from the process as well. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results (before fees and expenses) of the S&P U.S. Spin-Off Index (the "underlying index").  The fund generally will invest at least 90% of its total assets in securities that comprise the underlying index. The underlying index is designed to measure the performance of U.S. companies that have been spun off from a parent company within the past four years. The fund is non-diversified. 

 The portfolio is overweight in industrials and healthcare relative to the category average by 24.8 and 5.5 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and consumer cyclical, underweight the average by 14.5 and 9.5 percentage points of assets, respectively. The portfolio is composed of 31 holdings and is relatively top-heavy. Of the strategy's assets, 60.1% are concentrated within the top 10 holdings, compared to the category’s 15.4% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 106% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Process

Invesco’s equity team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are four managers listed on the fund: Peter Hubbard, Tony Seisser, Michael Jeanette, Pratik Doshi. Experience on the team is abundant, with 12 years of average portfolio management experience. Together, they manage a total of 145 strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate. This group has been working together for a while and has been successful in retaining talent compared to peers, with no departures in the last five years.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

Invesco succeeds in a number of areas but also has its share of subpar offerings, along with many others that land somewhere in the middle. A mid-2023 change of CEO, from longtime chief Marty Flanagan to veteran Invesco executive Andrew Schlossberg, is noteworthy, and several other executives retired or departed in 2023. Portfolio-manager shuffles aimed at bolstering poor performers, which began under Flanagan, have continued under Schlossberg, who told Morningstar his most important aim is bolstering “investment quality.” However, major changes of direction or approach are unlikely. The firm retains a Morningstar Parent rating of Average. 
Invesco’s international-equity teams in Texas and New York remain solid. However, the extensive U.S.-equity lineup needs improvement. Fixed-income offerings run the gamut: The multisector and short-term-bond areas are good, but corporate high-yield is less impressive. The firm’s exchange-traded fund lineup includes the popular Nasdaq-focused QQQ; passive strategies make up around 37% of Invesco’s assets under management. Invesco has not been averse to trying new types of strategies, and it was among the firms that immediately launched a spot bitcoin ETF after SEC approval in early 2024.
The picture outside the United States is mixed. Fund performance has been subpar in Asia, and while the picture has brightened in the United Kingdom and Europe, that region still can’t be considered a strength.

Average

Parent

Invesco S&P Spin-Off ETF

CSD tracks an index of mostly large- and mid-cap US equities that have broken away from their parent firms in the last 4 years.

Proshares Pet Care ETF

Defiance Quantum ETF

Today, we discuss three thematic ETFs to buy for investors looking to tap into future trends, consumer preferences or disruptive technologies. Metrics suggest how fast investor sentiment towards certain themes, industries, countries or stocks may change on Wall Street.

Tap Into Trends: 3 Thematic ETFs to Capture the Market's Pulse

ARK Innovation ETF

JPMorgan BetaBuilders U.S. Mid Cap Equity ETF

ALPS Barron's 400 ETF

Innovator IBD(R) Breakout Opportunities ETF

Pacer US Cash Cows Growth ETF

AdvisorShares Focused Equity ETF

Invesco Zacks Mid-Cap ETF

First Trust Dorsey Wright Momentum & Dividend ETF

The Xtrackers Russell US Multifactor ETF

Global X SuperDividend US ETF

WisdomTree U.S. MidCap Dividend Fund

First Trust Dorsey Wright Momentum & Value ETF

Invesco Russell 1000 Equal Weight ETF

Amplify Etho Climate Leadership US ETF

WisdomTree U.S. MidCap Earnings Fund

First Trust Multi Cap Value AlphaDEX Fund

FstTr ET AlDex Shs Multi Cap Growth AlphaDEX Fund

Innovator IBD 50 ETF

Franklin U.S. Mid Cap Multifactor Index ETF

First Trust Mid Cap Core AlphaDEX Fund

First Trust Mid Cap Growth AlphaDEX Fund

iShares Focused Value Factor ETF

US equities, as measured by the S&P 500 Index, have performed strongly so far in 2023.

Why Now For U.S. Equity Income?

First Trust US Equity Opportunities ETF

Renaissance IPO ETF

Johnson & Johnson

Kenvue

Kenvue is the world's largest pure-play consumer health company by revenue, and makes well-known products, including Tylenol, Neutrogena, Listerine, Johnson???s', Band-Aid, Aveeno, Zyrtec and Nicorette.

ETFs to Bet on the Successful Debut of Kenvue

Invesco S&P 500 Equal Weight Health Care ETF

Shares of GE HealthCare Technologies Inc. are up more than 3.5% in mid-day trading Monday after the company delivered strong revenue growth in its first results as a public company. The Chicago-based global medical technology company on Monday reported revenue growth of 7.6% to 4.

Get Exposure to GE HealthCare With RYH and CSD

More companies are turning to spinoffs as a way of unlocking shareholder value, and that could have implications for the Invesco S&P Spin-Off ETF (NYSEARCA:CSD) — the lone exchange traded fund dedicated to this particular corporate action. Last year, 34 companies announced spinoffs, and there are 20 such deals waiting to be completed across a variety [.

Spinoff ETF Could Spin Back Into Spotlight

Amplify Mobile Payments ETF

Renaissance International IPO ETF

Intuitive Surgical

NVIDIA

VictoryShares Nasdaq Next 50 ETF

SPDR FactSet Innovative Technology ETF

We believe these innovative stocks are forward-thinking and disruptive and therefore belong in long-term portfolios. The post 7 Innovative Stocks With Their Eyes on the Future appeared first on InvestorPlace.

7 Innovative Stocks With Their Eyes on the Future

IQ Merger Arbitrage ETF

Corporate actions like IPOs, M&A and spinoffs are picking up pace. These ETFs may benefit.

How Corporate Action ETFs Work

Penn Entertainment

Roundhill Sports Betting & iGaming ETF

Invesco S&P MidCap 400 Pure Value ETF

Previously on the brink with rampant speculation about its ability to survive in a zero revenue environment, Penn National Gaming (NASDAQ: PENN) is easily one of this year's best redemption stories, returning more than 1,700% from its March lows.

3 ETFs With Powerful Penn National Exposure

Global X FinTech ETF

Here we discuss the impact of PayPal's Q2 earnings results on certain ETFs with high exposure to the global technology platform and digital payments leader.

ETFs in Focus on PayPal's (PYPL) Mixed Q2 Earnings

News for Invesco S&P Spin-Off ETF ETF (CSD)