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Should You Invest in the Invesco S&P SmallCap Information Technology ETF (PSCT)?

Sector ETF report for PSCT

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This story originally appeared on Zacks

Launched on 04/07/2010, the Invesco S&P SmallCap Information Technology ETF (PSCT) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.

- Zacks

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $495.71 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. PSCT seeks to match the performance of the S&P SmallCap 600 Capped Information Technology Index before fees and expenses.

The S&P SmallCap 600 Capped Information Technology Index measures the overall performance of common stocks of US information technology companies.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.29%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.02%.

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 100% of the portfolio.

Looking at individual holdings, Power Integrations Inc (POWI) accounts for about 3.54% of total assets, followed by Microstrategy Inc (MSTR) and 3d Systems Corp (DDD).

The top 10 holdings account for about 29.72% of total assets under management.

Performance and Risk

The ETF has added about 20.47% so far this year and is up about 63.50% in the last one year (as of 11/02/2021). In that past 52-week period, it has traded between $94.19 and $148.99.

The ETF has a beta of 1.17 and standard deviation of 29.92% for the trailing three-year period, making it a high risk choice in the space. With about 71 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P SmallCap Information Technology 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, PSCT 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 $47.50 billion in assets, Vanguard Information Technology ETF has $52.34 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.

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 S&P SmallCap Information Technology ETF (PSCT): ETF Research Reports

 

Power Integrations, Inc. (POWI): Free Stock Analysis Report

 

3D Systems Corporation (DDD): Free Stock Analysis Report

 

Technology Select Sector SPDR ETF (XLK): ETF Research Reports

 

MicroStrategy Incorporated (MSTR): Free Stock Analysis Report

 

Vanguard Information Technology ETF (VGT): ETF Research Reports

 

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