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Should You Invest in the Invesco S&P SmallCap Information Technology ETF (PSCT)?

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The Invesco S&P SmallCap Information Technology ETF (PSCT) was launched on 04/07/2010, 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.

Sector ETFs are also funds of convenience, offering many 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 8, placing it in top 50%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $525.74 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. PSCT seeks to match the performance of the S&P SmallCap 600 Capped Information Technology Index before fees and expenses.

The S&P SmallCap 600 Capped Information Technology Index measures the overall performance of common stocks of US information technology companies.

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 0.29%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.01%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.

Looking at individual holdings, Power Integrations Inc (POWI) accounts for about 4.42% of total assets, followed by Sps Commerce Inc (SPSC) and Maxlinear Inc (MXL).

The top 10 holdings account for about 31.41% of total assets under management.

Performance and Risk

The ETF return is roughly 0% and is up about 26.26% so far this year and in the past one year (as of 01/03/2022), respectively. PSCT has traded between $121.75 and $156 during this last 52-week period.

The ETF has a beta of 1.16 and standard deviation of 29.53% for the trailing three-year period, making it a high risk choice in the space. With about 69 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P SmallCap Information Technology 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, PSCT 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.

Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $51.87 billion in assets, Vanguard Information Technology ETF has $56.32 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.

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 S&P SmallCap Information Technology ETF (PSCT): ETF Research Reports
 
Power Integrations, Inc. (POWI) : Free Stock Analysis Report
 
SPS Commerce, Inc. (SPSC) : Free Stock Analysis Report
 
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
 
MaxLinear, Inc (MXL) : Free Stock Analysis Report
 
Vanguard Information Technology ETF (VGT): ETF Research Reports
 
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