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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

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

- Zacks

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

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.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

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 $819.95 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for PWB are 0.56%, which makes it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 0.06%.

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.

PWB's heaviest allocation is in the Information Technology sector, which is about 37.80% of the portfolio. Its Healthcare and Telecom round out the top three.

Looking at individual holdings, Tesla Inc (TSLA) accounts for about 5.14% of total assets, followed by Nvidia Corp (NVDA) and Thermo Fisher Scientific Inc (TMO).

PWB's top 10 holdings account for about 36.41% of its total assets under management.

Performance and Risk

The ETF return is roughly 19.81% and is up about 20.71% so far this year and in the past one year (as of 12/08/2021), respectively. PWB has traded between $63.11 and $81.72 during this last 52-week period.

PWB has a beta of 0.92 and standard deviation of 24.21% for the trailing three-year period, which makes the fund 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 $90.12 billion in assets, Invesco QQQ has $210.55 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

 

Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report

 

Tesla, Inc. (TSLA): Free Stock Analysis Report

 

Invesco QQQ (QQQ): ETF Research Reports

 

Vanguard Growth ETF (VUG): ETF Research Reports

 

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Zacks Investment Research