PKW: Buyback ETF Combining Value And Growth

seekingalpha04-22

Invesco BuyBack Achievers ETF invests in companies that have reduced shares outstanding by at least 5% in the last 12 months.The portfolio massively underweights technology, and beats the benchmark ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPKW: Buyback ETF Combining Value And Growth\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-22 20:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4685055-pkw-buyback-etf-combining-value-growth><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Invesco BuyBack Achievers ETF invests in companies that have reduced shares outstanding by at least 5% in the last 12 months.The portfolio massively underweights technology, and beats the benchmark ...</p>\n\n<a href=\"https://seekingalpha.com/article/4685055-pkw-buyback-etf-combining-value-growth\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4550","symbol_name":"红杉资本持仓","start_time":0,"source_url":"https://seekingalpha.com/article/4685055-pkw-buyback-etf-combining-value-growth","article_id":"2429255859","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1912124068/image_1912124068.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2429255859","pubTimestamp":1713790277,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Invesco BuyBack Achievers ETF invests in companies that have reduced shares outstanding by at least 5% in the last 12 months.The portfolio massively underweights technology, and beats the benchmark re","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4550":"红杉资本持仓","BK4588":"碎股","SHRY":"First Trust Bloomberg Shareholder Yield ETF","BK4585":"ETF&股票定投概念","PKW":"Invesco BuyBack Achievers ETF","IWV":"iShares Russell 3000 Index Fund","SYLD":"股东总收益美股ETF-Cambria","DIVB":"iShares Core Dividend ETF","FDN":"First Trust Dow Jones Internet I"},"translate_title":"PKW：价值与增长相结合的回购ETF","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DIVB":1,"FDN":1,"IWV":1,"PKW":1,"SHRY":1,"SYLD":1,"US7Y.BOND":0.9,"US10Y.BOND":0.9,"US12M.BOND":0.9,"US2Y.BOND":0.9,"US30Y.BOND":0.9,"US3Y.BOND":0.9,"US5Y.BOND":0.9,"US6M.BOND":0.9,"US912797GW17.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797HH31.BOND":0.6,"US912797HE00.BOND":0.6,"US912797HG57.BOND":0.6,"US912797GB79.BOND":0.6,"US912797FS14.BOND":0.6,"US912797FH58.BOND":0.6,"US912796CX52.BOND":0.6},"content_text":"Invesco BuyBack Achievers ETF invests in companies that have reduced shares outstanding by at least 5% in the last 12 months.The portfolio massively underweights technology, and beats the benchmark regarding value, growth and return metrics.PKW has outperformed other buyback-focused ETFs over the last 12 months, but has lagged Cambria Shareholder Yield ETF in a longer time frame.   Andrii Dodonov PKW strategy Invesco BuyBack Achievers ETF (NASDAQ:PKW) started investing operations on 12/20/2006 and tracks the NASDAQ US BuyBack Achievers Index. It has 204 holdings, a distribution yield of 1.21% and a total expense ratio of 0.62%. Dividends are paid quarterly. As described by Nasdaq, the underlying index “is comprised of United States securities issued by corporations that have effected a net reduction in shares outstanding of 5% or more in the trailing 12 months”. Constituents must meet a liquidity threshold, and they are weighted based on a modified market capitalization methodology, with a limit of 5% by issuer. The index is reconstituted annually and rebalanced quarterly. The portfolio turnover rate was 60% in the most recent fiscal year. I ran a simulation on Portfolio123 to evaluate the performance of a ranking system based on buyback yield defined as: (Equity Purchased TTM - Equity Issued TTM)/Market Capitalization The simulation is run in the S&P 500 index, by ranking stocks in 10 buckets from lower to higher shareholder yields. The next chart plots the annualized excess return of the 10 buckets with stocks in equal weight over the equal-weight S&P 500 index, used as a benchmark.   Shareholder yield ranking system performance since 1999 (Portfolio123) This simulation shows an annualized excess return of 2.84% for the top decile (on the right). It is significant enough to validate on 25 years of historical data the concept of buyback yield as a valuable investing factor. Like for all factors, the statistical bias varies with time. For the last 5 years, the annualized excess return for the same bucket is even better: 4.55% (next chart).   Shareholder yield ranking system performance, last 5 years ( Portfolio123) PKW portfolio PKW currently has about 54% of asset value in large cap companies, 30% in mid-caps and 16% in small caps. As the fund extends to all size segments, I will use as a benchmark the broad index Russell 3000, represented by iShares Russell 3000 ETF (IWV). PKW is much cheaper than IWV regarding valuation ratios, as reported in the next table. Moreover, it shows significantly higher growth rates. It is very rare for smart beta ETFs to combine strong value and growth characteristics.     PKW IWV   Price/Earnings 16.11 23.44   Price/Book 2.52 3.89   Price/Sales 1.11 2.52   Price/Cash Flow 10.32 15.96   Earnings growth 31.47% 21.04%   Sales growth 12.54% 8.31%   Cash flow growth 21.23% 8.72%   Click to enlarge Consumer discretionary is the heaviest sector with 20.8% of assets. Then, come financials (20%), industrials (18.3%) and healthcare (13.8%). Other sectors are below 11%. PKW massively underweights technology and almost ignores real estate, utilities and consumer staples.   PKW sector breakdown in % (chart: author; data: Invesco, iShares) The current top 10 holdings, representing 38.4% of asset value, are listed below with fundamental ratios. All weights are under 5%, so risks related to individual companies are moderate.   Ticker Name Weight EPS growth %TTM P/E TTM P/E fwd Yield%   TMUS T-Mobile US, Inc. 4.85 235.15 23.40 18.27 1.60   JNJ Johnson & Johnson 4.52 63.26 18.95 13.88 3.35   BKNG Booking Holdings, Inc. 4.43 51.51 28.94 19.53 1.02   CMCSA Comcast Corp. 4.40 211.30 10.86 9.45 3.08   LMT Lockheed Martin Corp. 4.28 26.91 16.84 17.81 2.72   DE Deere & Co. 4.17 27.34 11.66 14.67 1.47   FI Fiserv, Inc. 3.32 27.92 29.73 17.22 0   HCA HCA Healthcare, Inc. 3.04 -1.34 16.07 14.81 0.87   MPC Marathon Petroleum Corp. 2.77 -17.73 8.35 10.41 1.68   MCK McKesson Corp. 2.60 1.15 23.79 19.01 0.47   Click to enlarge Historical performance Since 1/1/2007, PKW has outperformed IWV by over 30% in total return, as reported in the next table. However, the difference in annualized return is only 41 bps. PKW shows a slightly higher volatility, resulting in a marginally lower risk-adjusted performance (Sharpe ratio).     Total Return Annual Return Drawdown Sharpe ratio Volatility   PKW 397.08% 9.71% -54.59% 0.56 17.61%   IWV 365.73% 9.30% -55.61% 0.57 16.40%   Click to enlarge The annual sum of distributions has increased from $0.27 per share in 2013 to $1.16 in 2023 (+330% in 10 years!). However, distributions have been quite irregular, as reported on the chart below.   PKW distribution history (Seeking Alpha) PKW vs competitors The next table compares characteristics of PKW and 3 U.S. equity ETFs focused on buybacks:  iShares Core Dividend ETF (DIVB) Cambria Shareholder Yield ETF (SYLD) First Trust Bloomberg Shareholder Yield ETF (SHRY)      PKW DIVB SYLD SHRY   Inception 12/20/2006 11/7/2017 5/13/2013 6/20/2017   Expense Ratio 0.62% 0.05% 0.59% 0.60%   AUM $1.08B $328.44M $1.18B $18.25M   Avg Daily Volume $2.28M $2.48M $6.65M $37.74K   Holdings 204 410 102 52   Top 10 38.40% 28.36% 10.90% 38.55%   Turnover 60.00% 65.00% 41.00% 30.00%   Click to enlarge The next chart plots total returns starting on 11/13/2017 to match all inception dates. PKW beats DIVB and SHRY, but is behind Cambria’s fund.   PKW vs. peers, since 11/13/2017 (Seeking Alpha) However, PKW has been the best performer over the last 12 months:   PKW vs. peers, 12-month return (Seeking Alpha) Takeaway  Invesco BuyBack Achievers ETF (PKW) invests in companies that have reduced shares outstanding by at least 5% over the last 12 months. The portfolio massively underweights technology, and it is well-diversified across sectors and holdings. Compared to the broad index Russell 3000, PKW is attractive regarding value, growth and return metrics. PKW has outperformed other buyback-focused ETFs over the last 12 months, but has lagged Cambria Shareholder Yield ETF since November 2017.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2429255859"}