We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco Large Cap Growth ETF (PWB) a Strong ETF Right Now?
Read MoreHide Full Article
A smart beta exchange traded fund, the Invesco Large Cap Growth ETF (PWB - Free Report) debuted on 03/03/2005, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, PWB has amassed assets over $849.91 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. This particular fund 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
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 PWB are 0.56%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.24%.
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.
Representing 31.30% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Salesforce Inc (CRM - Free Report) accounts for about 3.75% of the fund's total assets, followed by Costco Wholesale Corp (COST - Free Report) and Amazon.com Inc (AMZN - Free Report) .
PWB's top 10 holdings account for about 33.98% of its total assets under management.
Performance and Risk
The ETF has added about 14.97% so far this year and is up roughly 37.01% in the last one year (as of 04/04/2024). In the past 52-week period, it has traded between $63.87 and $90.45.
The fund has a beta of 1.01 and standard deviation of 20.92% for the trailing three-year period, which makes PWB a medium risk choice in this particular 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 - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $117.10 billion in assets, Invesco QQQ has $258.03 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco Large Cap Growth ETF (PWB) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco Large Cap Growth ETF (PWB - Free Report) debuted on 03/03/2005, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, PWB has amassed assets over $849.91 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. This particular fund 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
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 PWB are 0.56%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.24%.
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.
Representing 31.30% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Salesforce Inc (CRM - Free Report) accounts for about 3.75% of the fund's total assets, followed by Costco Wholesale Corp (COST - Free Report) and Amazon.com Inc (AMZN - Free Report) .
PWB's top 10 holdings account for about 33.98% of its total assets under management.
Performance and Risk
The ETF has added about 14.97% so far this year and is up roughly 37.01% in the last one year (as of 04/04/2024). In the past 52-week period, it has traded between $63.87 and $90.45.
The fund has a beta of 1.01 and standard deviation of 20.92% for the trailing three-year period, which makes PWB a medium risk choice in this particular 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 - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $117.10 billion in assets, Invesco QQQ has $258.03 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.