Is Invesco KBW Premium Yield Equity REIT ETF (KBWY) a Strong ETF Right Now?

Making its debut on 12/02/2010, smart beta exchange traded fund Invesco KBW Premium Yield Equity REIT ETF (KBWY) provides investors broad exposure to the Real Estate ETFs category of the market.What Are Smart Beta ETFs?The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexThe fund is sponsored by Invesco. It has amassed assets over $211.89 million, making it one of the average sized ETFs in the Real Estate ETFs. Before fees and expenses, this particular fund seeks to match the performance of the KBW Nasdaq Premium Yield Equity REIT Index.The KBW Nasdaq Premium Yield Equity REIT Index is a dividend weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the US.Cost & Other ExpensesWhen considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.Annual operating expenses for KBWY are 0.35%, which makes it on par with most peer products in the space.The fund has a 12-month trailing dividend yield of 9.86%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Real Estate sector - about 100% of the portfolio.When you look at individual holdings, Global Net Lease Inc (GNL) accounts for about 6.52% of the fund's total assets, followed by Site Centers Corp (SITC) and Brandywine Realty Trust (BDN).Its top 10 holdings account for approximately 46.09% of KBWY's total assets under management.Performance and RiskThe ETF has lost about -9.43% and is up about 0.87% so far this year and in the past one year (as of 05/30/2025), respectively. KBWY has traded between $14.41 and $21.54 during this last 52-week period.The ETF has a beta of 1.11 and standard deviation of 23.63% for the trailing three-year period, making it a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.AlternativesInvesco KBW Premium Yield Equity REIT ETF is not a suitable option for investors seeking to outperform the Real Estate ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.Real Estate Select Sector SPDR ETF (XLRE) tracks Real Estate Select Sector Index and the Schwab U.S. REIT ETF (SCHH) tracks Dow Jones U.S. Select REIT Index. Real Estate Select Sector SPDR ETF has $7.33 billion in assets, Schwab U.S. REIT ETF has $7.92 billion. XLRE has an expense ratio of 0.08% and SCHH charges 0.07%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Real Estate ETFs.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco KBW Premium Yield Equity REIT ETF (KBWY): ETF Research Reports Brandywine Realty Trust (BDN): Free Stock Analysis Report Global Net Lease, Inc. (GNL): Free Stock Analysis Report Real Estate Select Sector SPDR ETF (XLRE): ETF Research Reports Schwab U.S. REIT ETF (SCHH): ETF Research Reports SITE CENTERS CORP. (SITC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks