Strength in Invesco Global Listed Private Equity ETF's People Pillar is partially offset by an Average Process Pillar rating, leading to a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in liquidity exposure and volatility exposure compared with category peers. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. And low volatility exposure is rooted in stocks that have a lower 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

Regions Financial

Gecimed SA

Carlyle Group

Blackstone Group

Halliburton

Blue Owl Capital

Hamilton Lane

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. Invesco Global Listed Private Equity ETF earns an Average Process Pillar rating. 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 beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar 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 Red Rocks Global Listed Private Equity Index.  The fund generally will invest at least 90% of its total assets in securities (including American depositary receipts ("ADRs") and global depositary receipts ("GDRs")) that comprise the underlying index. The underlying index is composed of securities, ADRs and GDRs of 40 to 75 private equity companies, including business development companies ("BDCs"), master limited partnerships ("MLPs"), and alternative asset managers and other entities that are listed on a nationally recognized exchange. 

 The portfolio is overweight in financial services and communication services relative to the category average by 76.5 and 2.6 percentage points, respectively. The sectors with low exposure compared to category peers are industrials and technology, underweight the average by 21.2 and 18.6 percentage points of assets, respectively. The portfolio is composed of 66 holdings and is relatively concentrated. Specifically, 46.7% of the fund’s assets are housed within the top 10 holdings, as opposed to the typical peer's 16.2%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 38% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Average

Process

Invesco Global Listed Private Equity ETF benefits considerably from its equity team, earning it an Above Average People Pillar rating. There are four managers listed on the fund: Peter Hubbard, Tony Seisser, Michael Jeanette, Pratik Doshi. The team is well equipped, with an average of 12 years of portfolio management experience. Together, they manage a total of 145 strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position 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.

Parent

Invesco Global Listed Private Equity ETF

PSP tracks a modified market-cap weighted index of publicly listed private equity firms.

Investing in public stocks of private equity firms can generate significant returns and benefit from professional management and strategic insights. The Invesco Global Listed Private Equity ETF allows investors to access the private equity sector and holds a diverse range of private equity firms. PSP has a large allocation to the financial sector and carries risks inherent to private equity investments, but can provide diversification benefits and potential relative strength against the sector.

PSP: A Public Way To Play Private Equity

This thesis aims to address the needs of investors looking to diversify beyond equities and bonds. In this case private equity in the form of the PSP ETF represents a suitable alternative investment. For this matter, it is important to elaborate on the risks associated with PE especially given that both Warren Buffett and Charlie Munger are against investing in alternatives.

PSP ETF: The Private Equity Diversifier Since Leverage Is Not That Bad

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PSP is not particularly discounted despite dangers to PE balance sheets. Higher for longer could mean impairments coming in, especially for those massive 2021 outlays that are going to be benefiting from no multiple effects and may have exposure to rates. While debt arrangements may make a somewhat safe deleveraging possible, it's unclear given NAV-related loans and reports of some financial concerns.

PSP: Big Balance Sheets Are A Risk In 'Higher For Longer' Environment

Private equity firms may benefit from market downturns by acquiring quality assets at lower prices and restructuring struggling companies. Private equity may be less volatile and more "recession-proof" compared to other financial subsectors like banking and insurance. The growing demand for private funding within innovative spaces like artificial intelligence presents opportunities for private equity businesses to capitalize on market trends.

PSP: Private Equity Shining Bright As Clouds Protrude Over Public Markets

We see valuation data from more than 400 funds each quarter, and it suggests the recovery from a relatively shallow downturn may be underway for buyout funds. How did private equity funds, and especially buyout funds, hold up so well during the recent turmoil and volatility in the public markets?

Private Equity Valuations Withstand The Volatility Of 2022

PSP invests in publicly listed private equity firms and related finance companies. Following a historically challenging 2022 PE deal activity and portfolio company returns, the segment is well-positioned to rebound.

PSP: Private Equity ETF Can Storm Back In 2023

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The market is rife with high inflation risks and lower growth, meaning a stagflationary scenario for the most developed economies, including the United States.

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The Invesco Global Listed Private Equity Portfolio ETF invests in companies that supply private equity to other smaller but private companies who might not have to bank loans. Before examining PSP, a brief overview of the private equity market will be done, including a list of the largest private equity firms.

PSP Allows You Entry Into Private Equity World

PSP invests in publicly traded PE firms and related investment companies. The segment has been hard hit by the market selloff into several headwinds.

Invesco Global Listed Private Equity Portfolio ETF: Don't Count The PE Guys Out

Many investors are familiar with private equity companies, such as Apollo Global Management (NYSE:APO) and Blackstone (NYSE:BX), but getting into those doors is difficult to say the least. Clients of private equity firms are usually endowments, institutional investors, pension plans, and ultra-high net worth investors.

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PSP focuses on private equity companies. The fund offers investors a strong, growing 7.5% dividend yield, and quite a few other benefits too.

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The largest funds investing in private equity are having a banner year, and investors can get in on the action with exchange-traded funds (ETFs) like the Invesco Global Listed Private Equity ETF (PSP). Private equity exposure was once the realm of the uber-wealthy, but ETFs have given investors access to this niche corner of the capital [.

As Private Equity Funds Are Set for Banner Year, Get Exposure With “PSP”

With public market valuations at frothy levels, income investors may find it increasingly difficult to put their capital to work at attractive yields. One possible option which remains open is the listed private equity space.

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With yields so low, certain risk-on sentiments can probably be exercised even with the bond investing. High-dividend paying equity ETFs are too great options.

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COVID-19 has certainly changed the landscape of the capital markets and private equity is not any different. Nonetheless, there are still opportunities to be had in private equity that can't be accessed in publicly-traded investments and a Joe Biden-Kamala Harris administration could propel the Invesco Global Listed Private Equity ETF (PSP) to new heights.

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Invesco's Global Listed Private Equity ETF is the best way to diversify your portfolio into private equity investments.

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