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Should You Invest in the Invesco NASDAQ Internet ETF (PNQI)?

Sector ETF report for PNQI

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This story originally appeared on Zacks

The Invesco NASDAQ Internet ETF (PNQI) was launched on 06/12/2008, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Internet 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.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $937.05 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Internet segment of the equity market. PNQI seeks to match the performance of the NASDAQ Internet Index before fees and expenses.

The Nasdaq CTA Internet Index is a modified market-capitalization weighted index designed to track the performance of the largest & most liquid U.S.-listed companies engaged in internet-related businesses & that are listed on one of the three major U.S. stock exchanges.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 36.80% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Alphabet Inc (GOOG) accounts for about 8.51% of total assets, followed by Adobe Inc (ADBE) and Amazon.com Inc (AMZN).

The top 10 holdings account for about 60.05% of total assets under management.

Performance and Risk

The ETF has lost about -4.18% so far this year and is down about -4.85% in the last one year (as of 12/29/2021). In that past 52-week period, it has traded between $207.94 and $262.24.

The ETF has a beta of 1.06 and standard deviation of 26.14% for the trailing three-year period, making it a high risk choice in the space. With about 82 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco NASDAQ Internet 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, PNQI is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

ARK Next Generation Internet ETF (ARKW) tracks N/A and the First Trust Dow Jones Internet ETF (FDN) tracks Dow Jones Internet Composite Index. ARK Next Generation Internet ETF has $3.99 billion in assets, First Trust Dow Jones Internet ETF has $10.07 billion. ARKW has an expense ratio of 0.79% and FDN charges 0.51%.

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 NASDAQ Internet ETF (PNQI): ETF Research Reports

 

Alphabet Inc. (GOOG): Free Stock Analysis Report

 

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

 

Adobe Inc. (ADBE): Free Stock Analysis Report

 

ARK Next Generation Internet ETF (ARKW): ETF Research Reports

 

First Trust Dow Jones Internet ETF (FDN): ETF Research Reports

 

To read this article on Zacks.com click here.

 

Zacks Investment Research