One strategy that may be well-positioned to emerge stronger from market volatility is investing in companies with a history of repurchasing their own shares when they believe their stock is undervalued. Stock buybacks allow management teams — who have insider knowledge of their businesses — to cut through market noise and focus on the company’s perceived long-term value. Much like an individual investor purchasing shares with the hope of appreciation, companies that strategically repurchase their own stock at favorable times can enhance shareholder value. The reverse can also be true too, poorly timed buybacks can be detrimental.
A stock buyback or share repurchase reduces the number of publicly available shares, which can potentially boost the value of the remaining shares. For example, repurchasing shares can improve key financial metrics like earnings per share (EPS), since the same net income is spread across fewer shares. A higher EPS can also improve other financial ratios, such as the price-to-earnings (P/E) ratio, making the company more attractive to investors.
Companies undertake buybacks for various reasons, but they often view it as an investment in themselves — especially when they believe their stock is undervalued. So far this year, US companies have been repurchasing stock at a record pace. Year-to-date buyback announcements have exceeded $650 billion, as of May — the highest level ever recorded at this point in the year.
Investors looking to capitalize on buyback strategies can consider ETFs that focus on companies engaging in significant share repurchases. PKW, the Invesco BuyBack Achievers ETF targets US companies that have reduced their outstanding shares by at least 5% in the most recent fiscal year. For international exposure, IPKW, the Invesco International BuyBack Achievers ETF, follows a similar approach with international firms.
Get more information on these ETFs below this video.
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All data and claims are supported by Bloomberg as of May 2025.
Earnings Per Share (EPS) ratio is a financial metric that indicates how much profit a company has made for each share of its stock. It is calculated by dividing the company's net income by the number of outstanding shares.
Price-to-Earnings (P/E) ratio is a valuation metric that compares a company's current share price to its earnings per share. It is calculated by dividing the market price per share by the EPS.
Past performance is not a guarantee of future results. An investment cannot be made into an index.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.
The opinions expressed are those of Invesco, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund’s return may not match the return of the Underlying Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
Stocks of small and mid-sized companies tend to be more vulnerable to adverse developments, may be more volatile, and may be illiquid or restricted as to resale.
PKW
Investments focused in a particular industry or sector are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.
The Fund may become “non-diversified,” as defined under the Investment Company Act of 1940, as amended, solely as a result of a change in relative market capitalization or index weighting of one or more constituents of the Index. Shareholder approval will not be sought when the Fund crosses from diversified to non-diversified status under such circumstances.
IPKW
Investments focused in a particular sector, such as energy and financials, are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.
The risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.
The Fund is non-diversified and may experience greater volatility than a more diversified investment.
The performance of an investment concentrated in issuers of a certain region or country, such as Europe, is expected to be closely tied to conditions within that region and to be more volatile than more geographically diversified investments.
The Fund may engage in frequent trading of its portfolio securities in connection with the rebalancing or adjustment of the Underlying Index.
Shares are not individually redeemable, and owners of the Shares may acquire those Shares from the Fund and tender those Shares for redemption to the Fund in Creation Unit aggregations only, typically consisting of 10,000, 20,000, 25,000, 50,000, 75,000, 80,000, 100,000, or 150,000 Shares.
Invesco Distributors, Inc. 6/25 NA 4516154
One strategy that may be well positioned to emerge stronger from market volatility is investing in companies with a history of repurchasing their own shares when they believe their stock is undervalued. Stock buybacks allow management teams — who have insider knowledge of their businesses — to cut through market noise and focus on the company’s perceived long-term value. Much like an individual investor purchasing shares with the hope of appreciation, companies that strategically repurchase their own stock at favorable times can enhance shareholder value. The reverse can also be true too, poorly timed buybacks can be detrimental.
A stock buyback or share repurchase reduces the number of publicly available shares, which can potentially boost the value of the remaining shares. For example, repurchasing shares can improve key financial metrics like earnings per share (EPS), since the same net income is spread across fewer shares. A higher EPS can also improve other financial ratios, such as the price-to-earnings (P/E) ratio, making the company more attractive to investors.
Companies undertake buybacks for various reasons, but they often view it as an investment in themselves — especially when they believe their stock is undervalued. So far this year, US companies have been repurchasing stock at a record pace. Year-to-date buyback announcements have exceeded $650 billion, as of May — the highest level ever recorded at this point in the year.
Investors looking to capitalize on buyback strategies can consider ETFs that focus on companies engaging in significant share repurchases. PKW, the Invesco BuyBack Achievers ETF targets US companies that have reduced their outstanding shares by at least 5% in the most recent fiscal year. For international exposure, IPKW, the Invesco International BuyBack Achievers ETF, follows a similar approach with international firms.
Get more information on these ETFs below.
Hedged equity strategies seek to mitigate market risk while participating in gains by combining long equity positions with hedging instruments such as options.
Investors seeking stock exposure and consistent income that can help offset market losses may want to consider option income ETFs.
In volatile markets, consider a hold-to-maturity bond strategy that locks in a known yield-to-maturity. Another option, global high yield corporate bonds.
NA4516154
All data and claims are supported by Bloomberg as of May 2025.
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Underlying Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
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