S&P 500 dividend growth remains sturdy. But more and more companies are leaning into share repurchase programs as avenues for returning capital to shareholders. That theme, which has clear momentum, could put a spotlight on the Invesco BuyBack Achievers ETF (PKW).
The $1.39 billion PKW turns 19 years old in December and follows the NASDAQ US BuyBack Achievers Index. PKW’s index is pertinent in assessing the ETF because it really is home to buyback achievers due to a mandate requiring member firms to shrink their shares outstanding counts by at least 5% over the past year.
As of July 28, PKW was higher by 11.1% on a year-to-date basis, beating the S&P 500 by 180 basis points. Impressive to be sure, but even with that gap in favor of the Invesco ETF, some market observers argue buybacks aren’t getting the credit they deserve for propping up stocks off the post-Liberation Day lows.
“One factor that’s flown under the radar is the surge in corporate stock buybacks,” noted Mark Hackett of Nationwide. “While institutional investors pulled back during the market selloff, retail investors kept buying—and so did companies. In fact, firms stepped up their buyback activity at a near-record pace, even amid the broader market volatility.”
PKW Timing Could Be Perfect
Market timing is difficult — if not an outright waste of time — for many investors. But identifying when a particular asset or idea could be at the right place at the right time is an easier task. Specific to PKW, there’s mounting evidence there are tailwinds supporting the outlook for the ETF; namely, a surge in repurchase activity.
