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.

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.

Investor-friendly, sector ETFs provide many options 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 3, placing it in top 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $210.35 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

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

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 92.90% of the portfolio.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.02% of total assets, followed by Ringcentral Inc (RNG) and Nvidia Corp (NVDA).

The top 10 holdings account for about 35.16% of total assets under management.

Performance and Risk

Year-to-date, the Invesco DWA Technology Momentum ETF has added about 6.76% so far, and is up roughly 47.51% over the last 12 months (as of 01/17/2020). PTF has traded between $56.62 and $82.49 in this past 52-week period.

The ETF has a beta of 1.17 and standard deviation of 23.84% for the trailing three-year period, making it a high risk choice in the space. With about 43 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 outstanding 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 $26.30 B in assets, Technology Select Sector SPDR Fund has $27.85 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
 
Ringcentral, Inc. (RNG) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Technology Select Sector SPDR Fund (XLK): ETF Research Reports
 
Vanguard Information Technology ETF (VGT): ETF Research Reports
 
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
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