Invesco S&P 500® ex-Rate Snsv LowVol ETF earns a Morningstar Medalist Rating of Neutral with strength in areas such as People offset by weaker spots such as Process. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy gets a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an underweight in volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more 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

Coca-Cola

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Republic Services

Colgate-Palmolive

Kimberly-Clark

McDonald's

Waste Management

PepsiCo

Walmart

Procter & Gamble

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 S&P 500® ex-Rate Snsv LowVol ETF earns a Below Average Process Pillar rating. 

The process is bolstered by tracking 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. However, the rating is limited by 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 subpar risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.8 stars, also holds the process back. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

 This strategy leans toward smaller, more value-oriented companies than its average peer in the Large Blend Morningstar Category. Examining additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to suffer from a significant loss. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-volatility stocks in recent years, meaning those that have a lower standard deviation of returns. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. Similarly, in recent months, the strategy also had less exposure to the Volatility factor than peers. This strategy also has tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over these years. Such positions do not tend to provide much ballast for a portfolio. In recent months, the strategy also had less Quality factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in consumer defensive and utilities relative to the category average by 15.5 and 12.2 percentage points, respectively. The sectors with low exposure compared to category peers are technology and communication services, underweight the average by 18.8 and 6.5 percentage points of assets, respectively. The strategy owns 101 securities and its assets are more dispersed than peers in the category. In particular, 12.6% of the fund’s assets are concentrated in the top 10 fund holdings, as opposed to the category’s 49.5% average. And finally, in terms of portfolio turnover, this fund trades more frequently than its average peer, potentially racking up additional expenses for investors and creating a drag on performance.

Below Average

Process

Invesco S&P 500® ex-Rate Snsv LowVol ETF benefits considerably from its 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. 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 500 ex-Rate Sensitive Low Volatility ETF

XRLV tracks an index of large-cap US equities, selected for positive correlation to rising interest rates and for low volatility. Stocks are weighted inversely to volatility.

Invesco S&P 500 High Dividend Low Volatility ETF

The Invesco S&P 500 High Dividend Low Volatility Portfolio ETF (SPHD) is widely followed and reviewed on Seeking Alpha. It invests using the S&P 500 Low Volatility Dividend Index. The Invesco S&P 500 ex-Rate Sensitive Low Volatility ETF (XRLV) wasn't covered until recently after five years. It invests based on the S&P 500 Low Volatility Rate Response Index.

SPHD Vs. XRLV: Comparing Low-Volatility ETFs

XRLV offers exposure to bellwether U.S. equities that are capable of benefiting from rising interest rates and are not prone to frenetic price swings. Utilities, consumer staples, and healthcare are the three sectors XRLV is overweight; energy is absent, while there are trace amounts of materials.

XRLV: Low-Volatility Portfolio Comes With Superior Quality, Disenchanting Valuation

Hoya Capital Housing ETF

Direxion Russell 1000 Value Over Growth ETF

Global X Internet of Things ETF

Procure Space ETF

Unusual ETFs have potential, but investors should stay away from the complex and focus on tangible investment ideas.

5 Unusual ETFs to Wrap Your Head Around

OShares U.S. Quality Dividend ETF

Invesco S&P 500 Low Volatility ETF

iShares Edge MSCI Min Vol USA ETF

Global growth worries, declining corporate profits in the United States and lingering U.S.-China trade tensions have given a life to low-volatility ETFs this year.

News for Invesco S&P 500 ex-Rate Sensitive Low Volatility ETF ETF (XRLV)