Is Invesco DWA Emerging Markets Momentum ETF (PIE) a Strong ETF Right Now?
Smart Beta ETF report for PIE
The Invesco DWA Emerging Markets Momentum ETF (PIE) was launched on 12/28/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $204.77 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, PIE seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index.
This Index is comprised of equity securities from countries deemed to have emerging economies, selected pursuant to a proprietary selection methodology designed to identify companies that demonstrate powerful relative strength characteristics. Index consisted of 100 securities of companies domiciled in Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hong Kong, Hungary, India ect.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.90%.
The fund has a 12-month trailing dividend yield of 1.25%.
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.
Looking at individual holdings, Yang Ming Marine Transport Corp accounts for about 3.26% of total assets, followed by China Meidong Auto Holdings Ltd and Shenzhou International Group Holdings Ltd.
Its top 10 holdings account for approximately 27.07% of PIE's total assets under management.
Performance and Risk
So far this year, PIE has added about 3.36%, and is up about 19.95% in the last one year (as of 10/11/2021). During this past 52-week period, the fund has traded between $19.56 and $27.67.
The ETF has a beta of 0.81 and standard deviation of 25.59% for the trailing three-year period, making it a medium risk choice in the space. With about 112 holdings, it effectively diversifies company-specific risk.
Invesco DWA Emerging Markets Momentum ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $79.23 billion in assets, Vanguard FTSE Emerging Markets ETF has $79.69 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
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 Emerging Markets Momentum ETF (PIE): ETF Research Reports
iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports
Vanguard FTSE Emerging Markets ETF (VWO): ETF Research Reports
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