A smart beta exchange traded fund, the Invesco Global ex-US High Yield Corporate Bond ETF (PGHY) debuted on 06/20/2013, and offers broad exposure to the High-Yield/Junk Bond ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PGHY has amassed assets over $227.47 million, making it one of the average sized ETFs in the High-Yield/Junk Bond ETFs. PGHY, before fees and expenses, seeks to match the performance of the DB Global Short Maturity High Yield Bond Index.
The ICE USD Global High Yield Excluding US Issuers Constrained Index comprises of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic and eurobond markets by non-U.S. issuers.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for PGHY are 0.35%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 7.11%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Industrial & Commercial Bank Of China Ltd-3.20%-12-31-2079 (ICBCAS) accounts for about 1.34% of the fund's total assets, followed by Samarco Mineracao Sa-9.50%-6-30-2031 (SAMMIN) and 1011778 Bc Ulc / New Red Finance Inc-4.00%-10-15-2030 (BCULC).
PGHY's top 10 holdings account for about 6.06% of its total assets under management.
Performance and Risk
The ETF return is roughly 3.11% so far this year and was up about 5.64% in the last one year (as of 08/11/2026). In the past 52-week period, it has traded between $19.31 and $20.26
The fund has a beta of 0.21 and standard deviation of 5.32% for the trailing three-year period, which makes PGHY a high risk choice in this particular space. With about 610 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco Global ex-US High Yield Corporate Bond ETF is a reasonable option for investors seeking to outperform the High-Yield/Junk Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
iShares iBoxx $ High Yield Corporate Bond ETF (HYG) tracks Markit iBoxx USD Liquid High Yield Index and the iShares Broad USD High Yield Corporate Bond ETF (USHY) tracks BofA Merrill Lynch U.S. High Yield Constrained Index. iShares iBoxx $ High Yield Corporate Bond ETF has $17.86 billion in assets, iShares Broad USD High Yield Corporate Bond ETF has $29.06 billion. HYG has an expense ratio of 0.49% and USHY changes 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the High-Yield/Junk Bond ETFs
Bottom Line
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Invesco Global ex-US High Yield Corporate Bond ETF (PGHY): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).