Neither people nor process stand out at Invesco Equal Weight 0-30 Years Trs ETF, but it gets enough right to help this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy’s management team earns an Average People Pillar rating. The strategy merits an Average Process 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

Invesco Equal Weight 0-30 Years Trs ETF earns an Average Process Pillar rating. Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The process is limited by the parent firm's five-year risk-adjusted success ratio of 44%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

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 ICE 1-30 Year Laddered Maturity U.S. Treasury Index.  The fund generally will invest at least 80% of its total assets in the components of the index. The index provider compiles, maintains and calculates the underlying index, and which 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.  

 This strategy has a modest 3.2% 12-month yield, lower than its average peers' 4.0%. It also has a 4.2% 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return). A lower yield tends to indicate lower credit risk. The portfolio has a higher average surveyed credit quality of AAA, compared with the typical peers' AA, and it holds no non-investment-grade assets, similar to its peers' average. Lower-credit-risk strategies are often able to navigate bear markets more effectively. In terms of interest-rate risk, compared with others in the Long Government category, this fund maintains a lower average effective duration of 10.6 years compared to the category's 17.5 years. The shorter a strategy's duration, the less sensitive it is to shifts in interest rates. This fund, with a 10.6-year duration, is expected to gain 10.6% of its net asset value if interest rates drop by 1 percentage point, and vice versa.

Average

Process

Invesco’s fixed income team is valuable but does not stand out as one of the industry's best, warranting an Average People Pillar rating. There are four managers listed on the fund: Peter Hubbard, Richard Ose, Tom Boksa, Greg Meisenger. Together, they manage a total of two strategies, with a Negative asset-weighted average Morningstar Medalist Rating. This indicates that the team falls short and is expected to produce negative alpha relative to the category median in aggregate.  

 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.

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.

Parent

Invesco Exchange-Traded Fund Trust II Invesco Equal Weight 0-30 Year Treasury ET

GOVI tracks an index that invests in an equal-weighted 30-year ladder of US Treasury securities.

Designed to provide broad exposure to the Government Bond ETFs category of the market, the Invesco Equal Weight 0-30 Year Treasury ETF (GOVI) is a smart beta exchange traded fund launched on 10/11/2007.

Is Invesco Equal Weight 0-30 Year Treasury ETF (GOVI) a Strong ETF Right Now?

Bond ladders are an investment strategy that can mitigate risks associated with interest rate fluctuations and reinvestment risks. Bond ladders provide income diversification, protection against interest rate volatility, and help with liquidity and financial planning. The Invesco Equal Weight 0-30 Year Treasury ETF is a cost-effective option for investors seeking a safe and steady income stream.

GOVI: A Laddered Portfolio That Works

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