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

Designed to provide broad exposure to the Technology – Broad segment of the equity market, the Invesco DWA Technology Momentum ETF (PTF) is a passively managed exchange traded fund launched on 10/12/2006.

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 – Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $312.92 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

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 98.50% of the portfolio.

Looking at individual holdings, Intuit Inc (INTU) accounts for about 4.74% of total assets, followed by Epam Systems Inc (EPAM) and Docusign Inc (DOCU).

The top 10 holdings account for about 37.80% of total assets under management.

Performance and Risk

So far this year, PTF has added roughly 11.21%, and it’s up approximately 31.82% in the last one year (as of 10/08/2021). During this past 52-week period, the fund has traded between $109.89 and $172.99.

The ETF has a beta of 1.06 and standard deviation of 36.67% for the trailing three-year period, making it a high risk choice in the space. With about 42 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.

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 $44.06 billion in assets, Vanguard Information Technology ETF has $49.21 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Invesco DWA Technology Momentum ETF (PTF): ETF Research Reports
 
Intuit Inc. (INTU) : Free Stock Analysis Report
 
EPAM Systems, Inc. (EPAM) : Free Stock Analysis Report
 
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
 
Vanguard Information Technology ETF (VGT): ETF Research Reports
 
DocuSign (DOCU) : Free Stock Analysis Report
 
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