Invesco Bloomberg Analyst Rating Improvers ETF

UPGD

Market cap $111M

Tracking the Bloomberg ANR Improvers Index, UPGD offers exposure to 50 analysts' darlings. This is a high-turnover strategy, and significant quarterly changes in the sector and factor mix should not come as a surprise. At this point, UPGD is heavy in industrials, IT, and consumer staples.

After the strategy change in March 2024, UPGD tracks the Bloomberg ANR Improvers Index. The idea to capitalize on equity research analysts' darlings is appealing, but returns are less so. UPGD has underperformed IVV since the index change, with December being especially challenging, and its contrarian equity mix is to blame.

The Invesco Bloomberg Analyst Rating Improvers ETF targets stocks with improving analyst ratings, aiming to capture potential market winners based on the Bloomberg ANR Improvers Index. The UPGD ETF updates its holdings quarterly, maintaining a diversified portfolio with significant allocations in Consumer Staples, Industrials, and Information Technology. Despite underperforming compared to the SPDR S&P 500 ETF, the fund's mid-cap focus and dynamic strategy offer unique exposure to analyst-upgraded stocks.

UPGD has seen a thorough recalibration earlier this year, with the underlying index replaced and its name changed. With a new strategy centered on "Bloomberg analyst rating improvers," UPGD has issues similar to its previous iteration. More specifically, the factor mix it is offering has a profound value tilt, while sufficient growth factor exposure is lacking, which is a disadvantage in the current environment.

During the shortened trading week leading up to the Easter holiday, a total of 10 new ETFs launched on the U.S. market. These include funds from BlackRock, Morgan Stanley, VanEck, Invesco, Eagle Capital and Inspire.