Should You Invest in the Invesco DWA Technology Momentum ETF (PTF)?
Sector ETF report for PTF
Looking for broad exposure to the Technology - Broad segment of the equity market? You should consider the Invesco DWA Technology Momentum ETF (PTF), a passively managed exchange traded fund launched on 10/12/2006.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
The fund is sponsored by Invesco. It has amassed assets over $291.88 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. PTF seeks to match the performance of the DWA Technology Technical Leaders Index before fees and expenses.
The DWA Technology Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 98.60% of the portfolio.
Looking at individual holdings, Intuit Inc (INTU) accounts for about 4.74% of total assets, followed by Epam Systems Inc (EPAM) and Docusign Inc (DOCU).
The top 10 holdings account for about 37.80% of total assets under management.
Performance and Risk
The ETF has added roughly 14.44% so far this year and was up about 36.30% in the last one year (as of 09/02/2021). In that past 52-week period, it has traded between $101.05 and $172.99.
The ETF has a beta of 1.05 and standard deviation of 36.57% for the trailing three-year period, making it a high risk choice in the space. With about 42 holdings, it has more concentrated exposure than peers.
Invesco DWA Technology Momentum ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PTF is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $46.30 billion in assets, Vanguard Information Technology ETF has $51.01 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.
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 DWA Technology Momentum ETF (PTF): ETF Research Reports
Intuit Inc. (INTU): Free Stock Analysis Report
EPAM Systems, Inc. (EPAM): Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
DocuSign Inc. (DOCU): Free Stock Analysis Report
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