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

Designed to provide broad exposure to the Real Estate ETFs category of the market, the Invesco KBW Premium Yield Equity REIT ETF (KBWY) is a smart beta exchange traded fund launched on 12/02/2010.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.Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexKBWY is managed by Invesco, and this fund has amassed over $237.4 million, which makes it one of the average sized ETFs in the Real Estate ETFs. KBWY, before fees and expenses, 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 ExpensesFor ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 9.66%.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.For KBWY, it has heaviest allocation in the Real Estate sector --about 100% of the portfolio.Taking into account individual holdings, Innovative Industrial Properties Inc (IIPR) accounts for about 6.27% of the fund's total assets, followed by Brandywine Realty Trust (BDN) and Community Healthcare Trust Inc (CHCT).The top 10 holdings account for about 46.73% of total assets under management.Performance and RiskSo far this year, KBWY has lost about -6.96%, and is down about -13.17% in the last one year (as of 07/30/2025). During this past 52-week period, the fund has traded between $14.41 and $21.54.The fund has a beta of 1.09 and standard deviation of 23.18% for the trailing three-year period, which makes KBWY a medium risk choice in this particular space. With about 28 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 $7.77 billion in assets, Schwab U.S. REIT ETF has $8.23 billion. XLRE has an expense ratio of 0.08% and SCHH changes 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 ETFsBottom 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>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 ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks