Howard Silverblatt, senior industry analyst at S&P Dow Jones Indices, pointed out that S&P 500 companies that have reported Q4 results are showing just a 1% dip in share repurchases from the record third-quarter buyback levels, with the amount 64.8% ahead of the fourth quarter in the year prior.
As more companies look to add value through share repurchases, ETF investors can also capitalize on the potential opportunity through buyback-themed ETF strategies.
For instance, ETF investors who believe in a rise in share repurchases can look to ETFs that specifically target companies that implement buyback schemes, including the Invesco Buyback Achievers ETF (NYSEArca: PKW), the SPDR S&P 500 Buyback ETF (NYSEArca: SPYB) and iShares U.S. Dividend and Buyback ETF (Cboe: DIVB).
PKW includes a broader selection of U.S. companies that have effected a net reduction in shares outstanding by 5% or more in the trailing 12 months. SPYB focuses on S&P 500 companies with the highest buyback ratio in the past 12 months. DIVB is comprised of U.S. stocks with a history of dividend payments and or share buybacks where holdings include those with the largest dividend and buyback programs in the market measured by dollar value.
For more information on the buybacks strategy, visit our buybacks category.