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Is Invesco Dynamic Large Cap Growth ETF (PWB) a Strong ETF Right Now?

Smart Beta ETF report for PWB

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This story originally appeared on Zacks

The Invesco Dynamic Large Cap Growth ETF (PWB) was launched on 03/03/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.

- Zacks

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

The fund is sponsored by Invesco. It has amassed assets over $873.92 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Large Cap Growth Intellidex Index.

The Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Operating expenses on an annual basis are 0.56% for this ETF, which makes it on par with most peer products in the space.

PWB's 12-month trailing dividend yield is 0.06%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

PWB's heaviest allocation is in the Information Technology sector, which is about 27.90% of the portfolio. Its Healthcare and Consumer Discretionary round out the top three.

Taking into account individual holdings, Nvidia Corp (NVDA) accounts for about 4.16% of the fund's total assets, followed by Adobe Inc (ADBE) and Paypal Holdings Inc (PYPL).

The top 10 holdings account for about 35.57% of total assets under management.

Performance and Risk

Year-to-date, the Invesco Dynamic Large Cap Growth ETF has added about 17.34% so far, and it's up approximately 23.85% over the last 12 months (as of 09/01/2021). PWB has traded between $59.18 and $78.85 in this past 52-week period.

The ETF has a beta of 0.91 and standard deviation of 24.39% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco Dynamic Large Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.

Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $85.50 billion in assets, Invesco QQQ has $192.27 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.



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Invesco Dynamic Large Cap Growth ETF (PWB): ETF Research Reports

 

NVIDIA Corporation (NVDA): Free Stock Analysis Report

 

Adobe Inc. (ADBE): Free Stock Analysis Report

 

Invesco QQQ (QQQ): ETF Research Reports

 

PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report

 

Vanguard Growth ETF (VUG): ETF Research Reports

 

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Zacks Investment Research