This ETF Has Doubled in 5 Years and Invests in Stocks With Strong Fundamentals
A good sign that a business is doing well is that it’s able to buy back its shares. If it’s able to do that consistently and reduce its overall share count significantly, it likely has solid cash on its books to deploy. And with a lower share count, that means valuation metrics like earnings per share and revenue per share will look better. And the more attractive those metrics are, the more likely it will be that the stocks will perform better and receive upgrades from analysts.
You can easily invest in companies which actively engage in share buy backs through an exchange-traded fund (ETF) which tracks them: the Invesco BuyBack Achievers ETF (NASDAQ:PKW). It invests in stocks which have reduced their share count by at least 5% over the past 12 months.
The ETF holds around 200 stocks, with some of its top holdings including Caterpillar (NYSE:CAT), Wells Fargo & Co. (NYSE:WFC), and Comcast (NASDAQ:CMCSA). The ETF encompasses stocks from several sectors, with the largest one being financials, which accounts for 26% of the ETF’s portfolio, followed by consumer discretionary at 22%, industrials at 15%, and energy at just under 10%.
The fund’s expense ratio is 0.61%, which is modest compared to other ETFs.
It yields 0.8% and year to date, the fund has risen by more than 7%. And in five years, it has soared by 120%. Overall, this ETF can be a good option and way for you to invest in relatively safe, blue chip stocks with strong fundamentals.
