Story highlights Access an investing strategy with Invesco’s low-cost iShares ETFs
They can help with the complex math of asset allocation and the impact it’s having on your portfolio.
If you’re looking to create a simple yet impactful plan to improve your financial life, it might be time to consider investing in low-cost exchange-traded funds (ETFs).
As a registered investment advisor (RIA), Invesco offers the iShares ETFs, the index-tracking investment vehicles that feature portfolio holdings and investment objectives that can be tailored to fit your needs. The funds feature conservative, balanced and growth strategies. And, like most ETFs, they typically track long-term market trends.
An ETF’s structure is similar to a mutual fund. It’s made up of a bundle of securities of a certain type that are all slightly different. Each component of the ETF’s portfolio must meet certain requirements to avoid the tax man. But the biggest differences are how you trade and how you hold your ETFs.
You trade ETFs like stocks. But since ETFs move in an ETF market, all of their positions must be booked daily. The goal is to trade your ETFs in the same way you would trade individual stocks on your own account. You’ll also make periodic cash settlements to reinvest in a new ETF that fits your investment strategy.
But that’s not all. The option to hold your ETFs on your own behalf is an exciting addition to the ETF investing experience. In this way, the whole process is completely transparent. No sales charge or fees are used to purchase or sell your ETFs; it’s simply accounted for in your expenses.
Like any financial product, this strategy can provide you with an economic and financial return that’s dependent on both your overall equity allocation and your risk tolerance. Still, ETFs enable you to move your money into higher yielding areas of the market at a tax-efficient rate.
We’ve dug up the next best thing to having iShares funds on your own.
Top-rated iShares Funds
There are a variety of iShares funds offered by Invesco. To help you determine which, we’ve analyzed their performance against four competing strategy ETFs. It’s estimated that Invesco’s iShares Active Bear ETF can provide returns roughly 2.4 times as powerful as a portfolio tracking the S&P 500 (VOO), 3.5 times as powerful as a portfolio tracking the MSCI US MSCI USA Momentum Index (USMI), 6.3 times as powerful as a portfolio tracking the MSCI USA Momentum Index (MTUM) and 7.7 times as powerful as a portfolio tracking the MSCI USA Minimum Volatility Index (USMV).
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An update on how all of Invesco’s funds have performed since year-end 2016.