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Should You Invest in the Invesco DWA Technology Momentum ETF (PTF)?

Zacks Equity Research

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.

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.

Additionally, sector ETFs offer convenient ways 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 7, placing it in top 44%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $256.61 M, 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

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 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 85.20% of the portfolio. Telecom and Healthcare round out the top three.

Looking at individual holdings, Enphase Energy Inc (ENPH) accounts for about 6.41% of total assets, followed by Paycom Software Inc (PAYC) and Match Group Inc (MTCH).

The top 10 holdings account for about 40.20% of total assets under management.

Performance and Risk

The ETF has added roughly 47.64% and it's up approximately 22.52% so far this year and in the past one year (as of 08/19/2019), respectively. PTF has traded between $48.33 and $79.48 during this last 52-week period.

The ETF has a beta of 1.21 and standard deviation of 23.50% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco DWA Technology Momentum 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, PTF is an excellent 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.

Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index and the Technology Select Sector SPDR Fund (XLK) tracks Technology Select Sector Index. Vanguard Information Technology ETF has $20.37 B in assets, Technology Select Sector SPDR Fund has $21.21 B. 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
 
Match Group, Inc. (MTCH) : Free Stock Analysis Report
 
Paycom Software, Inc. (PAYC) : Free Stock Analysis Report
 
Technology Select Sector SPDR Fund (XLK): ETF Research Reports
 
Vanguard Information Technology ETF (VGT): ETF Research Reports
 
Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
 
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