PowerShares S&P 500 High Price, Forecast, Insider, Ratings, Fundamentals & Signals

Invesco S&P 500 High Beta ETF holds about 100 stocks of the S&P 500 index with higher volatility. SPHB has characteristics pointing to a blend of growth and value styles. SPHB high-risk / high-reward strategy has failed to bring excess return in a bull market, and it is unlikely to succeed over a complete market cycle.

The S&P 500 is on the verge of reaching the 5,000 milestone mark for the first time ever. High-beta ETFs seem a perfect bet at present to make huge profits amid the bullish backdrop.

Stocks have rallied since October 27, but one indicator suggests the recovery may be on shaky ground. Invesco S&P 500® High Beta ETF has technical risks and a high allocation to the Information Technology sector. The chart for the SPHB ETF shows possible problems for the bulls, with resistance at previous all-time highs and potential for a pullback.

SPHB tracks 100 high-beta S&P 500 stocks. Launched in May 2011, the ETF has a reasonable 0.25% expense ratio, but has failed to gain much interest from an AUM perspective. Despite an upward-trending market over the last ten years, SPHB has lagged behind SPY by 30% while featuring, as expected, much higher volatility. Higher risk did not equal higher rewards. One likely reason is poor quality. I calculated a 8.26/10 profit score for SPHB, well behind SPY's 9.43/10 score, and backed by significant differences in ROTC and ROE margins.

The Invesco S&P 500 High Beta ETF seeks to track the S&P 500 High Beta Index, consisting of the 100 stocks with the highest beta. SPHB has underperformed the S&P 500 on both an absolute and risk-adjusted basis, but its exposure to mid-cap and small cap companies has been a key driver. SPHB has underperformed a blend of large cap, mid-cap, and small cap companies on a risk adjusted basis since inception.

Low-beta, steady stocks tend to have better risk-adjusted returns over time compared to high-beta stocks. The Invesco S&P 500 High Beta ETF focuses on high-beta stocks in the S&P 500 Index. Investing in SPHB can be rewarding during bull markets, but it comes with a high level of risk, especially in extended sectors like Technology.

High-beta stocks have outperformed defensive stocks in the stock market recently, raising questions about the effectiveness of low-volatility and dividend growth investing. ROBECO's research shows that low-volatility investing can significantly improve long-term performance, particularly in market environments with increased retail investor participation. Low-risk ETFs, such as healthcare names and dividend aristocrats, offer exposure to fundamentally strong factors and tend to perform well during periods of stagflation, high inflation, and decent economic growth.

High beta sustained its rally and handily outpaced the S&P 500 in July, underscoring the continued risk-on sentiment in the market. U.S. stocks rallied in July, as Wall Street celebrated rosy earnings and upbeat macroeconomic updates, including softening inflation and better-than-expected second-quarter GDP.

The two top-performing factors stood out during the first half for impressive outperformance over the benchmark. The S&P 500 High Beta Index and the S&P 500 Growth Index handily outpaced the parent S&P 500 during the first six months of 2023.

High beta stocks can provide leverage-like effects on returns, performing well during market upswings and worse during downturns. The Invesco S&P 500 High Beta ETF is a good investment during volatile market rebounds, using the VIX as an indicator. When the VIX is above 20, but below its level from 20 days ago, buy SPHB; hold until the VIX rises above its level from 20 days ago or falls below 20.