PKW Stock Recent News

The Inflation Reduction Act contained a controversial though bipartisan provision that applied a 1% levy to companies' share repurchase activities. However, data indicate that tax isn't yet hurting stock buybacks.

The pace of stock buybacks by S&P 500 member firms is likely to accelerate this year and in 2025, according to Goldman Sachs. That could renew investors' affinity for the Invesco BuyBack Achievers ETF (PKW).

The Invesco BuyBack Achievers ETF invests in companies that have reduced their shares outstanding by at least 5% in the past year.

The Invesco BuyBack Achievers ETF tracks the NASDAQ U.S. BuyBack Achievers Index. PKW has performed nearly in line with the S&P 500 since its launch in 2006, delivering strong risk-adjusted returns. The Fund has significantly outperformed value-based products.

Stock buybacks can be controversial. A company uses its cash to buy its own shares in the open market.

PKW tracks 315 US stocks that have effected a 5% net reduction in their shares outstanding over a 12-month period. We pick out some of the major themes that could weigh on PKW's prospects. The risk-reward on the charts does not look appealing.

PKW selects U.S. companies that have reduced shares outstanding by 5% or more in the last year. Fees are 0.61%, and the ETF manages $920 million in assets. The 5% threshold, combined with only utilizing one year's worth of buybacks, leads to high turnover. There is also no mechanism to remove current constituents that pause their buyback programs.

Share repurchases, or stock buybacks, have become increasingly prevalent in tech companies' earnings this year.

Corporate buybacks may surpass $1 trillion for the first time, according to S&P Global.

Invesco BuyBack Achievers ETF gives investors exposure to companies that buy back 5% of their shares or more. Buybacks are great if companies opportunistically buy below "intrinsic" value.