Should You Invest in the Invesco DWA Technology Momentum ETF (PTF)?
The Invesco DWA Technology Momentum ETF (PTF) was launched on 10/12/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $201.96 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. PTF seeks to match the performance of the DWA Technology Technical Leaders Index before fees and expenses.
The DWA Technology Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.
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 0.60%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 89% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Five9 Inc (FIVN) accounts for about 5.20% of total assets, followed by Apple Inc (AAPL) and Twilio Inc (TWLO).
The top 10 holdings account for about 42.50% of total assets under management.
Performance and Risk
So far this year, PTF has lost about -1.33%, and was up about 7.02% in the last one year (as of 06/05/2020). During this past 52-week period, the fund has traded between $57.94 and $92.50.
The ETF has a beta of 1.13 and standard deviation of 30.76% for the trailing three-year period, making it a high risk choice in the space. With about 36 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco DWA Technology Momentum 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, PTF 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.
Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index and the Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index. Vanguard Information Technology ETF has $29 billion in assets, Technology Select Sector SPDR ETF has $30.10 billion. VGT has an expense ratio of 0.10% and XLK charges 0.13%.
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 DWA Technology Momentum ETF (PTF): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Five9, Inc. (FIVN) : Free Stock Analysis Report
Twilio Inc. (TWLO) : Free Stock Analysis Report
Vanguard Information Technology ETF (VGT): ETF Research Reports
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