Invesco ETFs

Smart beta investing with Invesco ETFs

Discover how our smart beta strategies offer an alternative weight approach with exposure to factors to seek specific investment outcomes and help drive returns for investors in a transparent and cost-effective way.

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Why consider our smart beta ETFs?

We are a leader in smart beta ETF strategies. Investors can combine the potential benefits of smart beta investing with targeted factor exposure. We have continued to innovate our smart beta ETF lineup to provide exposure to a range of single and multi-factor strategies.

Alternative weight options

Our smart beta ETFs can help investors reduce concentration risk and better diversify their equity exposures using an alternative weight approach.

Factor types

Investors can access rewarded factors1, like value, size, quality, low volatility, dividend yield, and momentum, to generate potential excess returns. Each rewarded factor can be categorized into a factor type to help meet investment goals.

Value — Stocks trading at discount compared to intrinsic value based on measures, such as price-to-earnings ratio or sales.

Size — Stocks with smaller market capitalization.

Quality — Stocks with low leverage and high return on equity (ROE), cash flows, and profitability.

Low volatility — Stocks with lower-than-average volatility (standard deviation) or beta.

Dividend yield — Stocks with higher dividend payouts.

Momentum — Stocks with recent strong performance.

Frequently asked questions

It’s a portfolio weighting approach that provides an alternative to weighting by market cap — stock price multiplied by outstanding shares.  Some examples include equal weight and revenue weight which takes an underlying basket of stocks and weights by company net revenue. 

Factors investing is a subset of smart beta investing. Factor strategies select a group of stocks with similar characteristics and weight the stocks by the factor. Examples of factors: Value, size, quality, low volatility, momentum, and dividend yield.

Smart beta investing uses a weighting approach that can create a differentiated risk/return profile compared to market cap weighting. Factor investing groups stocks with similar quantifiable characteristics.

Our smart beta ETF line-up attempts to offer concentrated factor exposure through a methodical stock selection process with either unconstrained or wide-sector constraints. We offer a variety of equal weight and revenue-weighted smart beta ETFs.

As we continue to see a few large names dominate the weight of traditional market-cap indexes, a smart beta approach may offer investors a transparent way to reduce concentration risk and better diversify their equity exposures based on an alternative weighting approach. Factor investing helps investors access risk management strategies and can help them meet their financial objectives.

Footnotes

  • 1

    Rewarded factors have a credible reason to offer a persistent premium based on sources of systemic risk, investor behavioral biases, and structural limitations. They have been vetted in academic journals and have the potential for excess returns.