Stock buybacks can be controversial. A company uses its cash to buy its own shares in the open market. This lowers the share count, which increases earnings per share. The idea is that the rising EPS will help to support higher share prices over time. But things may not be so simple. Investors should always take a close look at companies’ buyback activity.
The fund was launched in December 2006, has $1.76 billion in assets and is weighted by capitalization, with a 5% cap on each holding when it is reconstituted each January and when it is rebalanced on the last trading day of April, July and October.
That category selection reflects the fund’s performance tendency, which is “to do well when the value factor is doing well,” Kalivas said during an interview. The Invesco BuyBack Achievers ETF’s better performance during 2022 isn’t enough to explain its outperformance over SPY over the past three years. Kalivas said that about half of PKW’s outperformance over the S&P 500 over the past three years has been “related to the financial sector.”