The Invesco Zacks Multi-Asset Income ETF (CVY) seeks to track the Zacks Multi-Asset Income Index, which measures the performance of a diversified portfolio of income-generating assets including dividend-paying stocks, REITs, and fixed-income securities selected for their yield potential and income sustainability.
How It Works
CVY employs a rules-based approach that allocates across multiple asset classes using Zacks' proprietary screening methodology to identify high-yielding securities with strong fundamentals. The fund typically holds 50-100 positions across equities, REITs, and bonds, with quarterly rebalancing to maintain target allocations. Asset allocation shifts dynamically based on relative value opportunities, with equity exposure generally ranging from 40-70% of assets depending on market conditions.
Key Features
- Multi-asset approach provides diversification across stocks, REITs, and bonds rather than single asset class focus
- Zacks fundamental screening targets sustainable income sources, not just highest current yields that may be unsustainable
- Relatively new 2018 inception means limited track record but potentially less institutional ownership and discovery opportunity
Risks
- This ETF can lose value when interest rates rise sharply, as both dividend stocks and bonds typically decline in rising rate environments
- Income sustainability risk exists if underlying companies cut dividends or distributions during economic downturns, reducing the fund's yield
- Multi-asset correlation risk means diversification benefits may disappear during market stress when all income assets decline together, potentially losing 20-30% in severe downturns
Who Should Own This
Best suited for income-focused investors with 3-5 year time horizons seeking current yield around 3.9% with some growth potential. Appropriate as satellite holding (10-25% of portfolio) for moderate risk tolerance investors wanting diversified income exposure beyond traditional dividend stocks or bond funds.