Is Invesco Large Cap Growth ETF (PWB) a Strong ETF Right Now?
The Invesco Large Cap Growth ETF (PWB) made its debut on 03/03/2005, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $656.67 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. PWB seeks to match the performance of the Dynamic Large Cap Growth Intellidex Index before fees and expenses.
The Dynamic Large Cap Growth Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for PWB are 0.55%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.45%.
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.
PWB's heaviest allocation is in the Information Technology sector, which is about 28.50% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.
When you look at individual holdings, Adobe Inc (ADBE) accounts for about 4.42% of the fund's total assets, followed by Eli Lilly & Co (LLY) and Oracle Corp (ORCL).
Its top 10 holdings account for approximately 35.56% of PWB's total assets under management.
Performance and Risk
The ETF has added about 19.61% and was up about 14.81% so far this year and in the past one year (as of 09/15/2023), respectively. PWB has traded between $56.26 and $72.31 during this last 52-week period.
PWB has a beta of 1 and standard deviation of 22.16% 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 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 $93.93 billion in assets, Invesco QQQ has $204.21 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 Large Cap Growth ETF (PWB): ETF Research Reports
Eli Lilly and Company (LLY) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
Adobe Inc. (ADBE) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
