Should Invesco Dynamic Large Cap Growth ETF (PWB) Be on Your Investing Radar?
Style Box ETF report for PWB
Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Invesco Dynamic Large Cap Growth ETF (PWB) is a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $831.20 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.56%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.06%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 26.80% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 4.16% of 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
PWB seeks to match the performance of the Dynamic Large Cap Growth Intellidex Index before fees and expenses. The Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.
The ETF has gained about 17.65% so far this year and was up about 30.58% in the last one year (as of 10/29/2021). In the past 52-week period, it has traded between $60.08 and $79.06.
The ETF has a beta of 0.92 and standard deviation of 24.27% 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.
Invesco Dynamic Large Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PWB is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $87.81 billion in assets, Invesco QQQ has $199.58 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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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