The PowerShares Buyback Achiever Portfolio (NYSEArca: PKW) has a lengthy history of outperforming the S&P 500. Over the past three years, PKW is up 90.1%, compared to “just” 67.9% for the benchmark U.S. index. Excluding 2013, PKW has outpaced the S&P 500 in every year except for last year dating back to 2008.
This year, the year-to-date gap is 770 basis points in favor of PKW, indicating the S&P 500 has its work cut out for it if it wants to top the buyback ETF. With those returns statistics in mind, it may not be surprising that PKW is outperforming some of the individual companies that have been the largest repurchasers of their own stock this year. [Buyback ETF Still Going Strong]
Year-to-date, PKW is up 27.6%, a performance that easily tops Apple (NasdaqGM: AAPL), Qualcomm (NasdaqGM: QCOM) and Texas Instruments (NasdaqGM: TXN). Not only is the technology sector the largest sector weight within the S&P 500, but those three companies are among the tech sector’s largest share repurchasers this year.
At the end of the first quarter, Texas Instruments and Qualcomm were both among the 10 largest repurchasers of their own shares in the S&P 500, reports Jonathan Burton for MarketWatch.
Other names on that list include American Express (NYSE: AXP), Lowe’s (NYSE: LOW) and PepsiCo (NYSE: PEP). Home improvement giant Lowe’s is the worst performer of that trio with a year-to-date gain of 22.3%, but none of the three have topped PKW.
Proving that PKW is the way to go for investors looking to capture value offered by those companies that are committed to large buybacks is this anecdote: Of the six stocks mentioned here thus far, only Lowe’s is found in the ETF’s 202-stock lineup. [Another Market-Beating Niche ETF]
PKW has also trumped the returns offered by companies that have recently announced new buybacks or additions to existing share repurchase plans. For example, Pfizer (NYSE: PFE) announced a $10 billion buyback earlier this year while EMC (NYSE: EMC) added $5 billion to its repurchase plan at the end of May, but PKW has beaten both stocks.
Noteworthy buybacks announced this month include AOL (NYSE: AOL), Capital One (NYSE: COF) and Krispy Kreme (NYSE: KKD). None of those stocks are found in PKW and only Krispy Kreme has performed better than the ETF this year.
PowerShares Buyback Achiever Portfolio
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of American Express, Apple and Pfizer.