Fast Facts About The Invesco KBW Premium Yield Equity REIT ETF
Invesco KBW Premium Yield Equity REIT ETF (NASDAQ:KBWY) started investing operations on 12/02/2010 and tracks the KBW Nasdaq Premium Yield Equity REIT Index. KBWY has 27 holdings, an SEC 30-Day Yield of 8.85%, a trailing 12-month distribution yield of 9.99%, and a total expense ratio of 0.35%. Distributions are paid monthly. KBWY is a rather small, but quite liquid ETF, with about $241 million in assets under management and $2.8 million in average daily dollar trading volume. The issuer, Invesco (IVZ), is an investment management company founded in 1935 and headquartered in Atlanta, Georgia. Its product includes mutual funds, unit trusts, exchange-traded funds, closed-end funds, and retirement plans.
As described in the prospectus by Invesco, the underlying index is…
…a modified-dividend yield-weighted index of domestic equity real estate investment trusts (“REITs”) of small- and mid-capitalization (…) that have competitive dividend yields and are publicly-traded in the U.S.
Eligible securities must be listed on a U.S. exchange and:
The index is reconstituted annually and rebalanced quarterly. Holdings are capped at 8%. The portfolio turnover rate was 86% in the most recent fiscal year and 73% in the previous year.
This article will use the Vanguard Real Estate Index Fund ETF (VNQ) as a benchmark.
The fund is exclusively invested in U.S. companies, mostly micro caps (about 75% of asset value). Diversified REITs, healthcare REITs, and office REITs lead the industry breakdown. Compared to the benchmark, KBWY massively overweights diversified REITs, office REITs, and hotel & resort REITs. It downplays retail REITs, residential REITs, and ignores several industries, such as tower REITs and real estate services.
The portfolio is concentrated. The top 10 holdings, listed in the next table, represent 47.5% of asset value, and the four heaviest positions weigh between 5% and 7%.
From a fundamental point of view, KBWY has value characteristics within the real estate sector. It is significantly cheaper than VNQ based on the price-to-book ratio, and has an inferior (and negative) book value growth rate.
Data: Fidelity
This is an example from 10/14/2025. Top holdings, weights, and metrics may have changed by the time you read this.
KBWY has lagged the sector benchmark VNQ by 4 percentage points in annualized return from 12/9/2010 to 10/14/2025. Moreover, it shows a higher risk in maximum drawdown and standard deviation of monthly return (“volatility” in the table below).
Data: Portfolio123
The gap in annualized return is even larger over the three years prior to 10/14/2025: 8.2 percentage points.
The share price of KBWY has lost 39.4% since its inception. In the same time, the cumulative inflation was about 48% (based on CPI), resulting in a loss of 68% in inflation-adjusted value for long-term shareholders.
Distribution history has been quite irregular, as plotted on the next chart. It was trending up until 2017, then down until 2021, and now up again. The annual sum of distributions for 2024 ($1.56 per share) is almost the same as in 2014 ($1.60), while inflation was about 34%.
KBWY has no close competitor. As far as I know, there is no other pure U.S. equity REIT ETF (without mortgage REITs or option income strategy) with a yield above 6%. Please leave a comment below if I’m wrong. The next table compares characteristics of KBWY and three U.S. equity REIT ETFs with yields above 4%:
* Calculated with Portfolio123 from 3/28/2019 to match inception dates.
KBWY has by far the highest yield, but the worst (and only negative) total return since March 2019. It is also the riskiest of these funds based on drawdown and volatility.
Invesco KBW Premium Yield Equity REIT ETF has a portfolio of 27 equity REITs focused on higher yields. With an impressive trailing 12-month yield of 10%, KBWY targets income-focused investors. However, it shows several risk factors: high volatility, deep drawdowns, long-term capital decay, and an uneven dividend trend. KBWY is a very risky long-term investment, although it may be profitable in tactical allocation and trading strategies.
This article answers these three main questions about KBWY:
