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Is PowerShares DWA Developed Markets Momentum Portfolio (PIZ) a Hot ETF Right Now?

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Designed to provide broad exposure to the Broad Developed World ETFs category of the U.S. equity market, the PowerShares DWA Developed Markets Momentum Portfolio (PIZ - Free Report) is a smart beta exchange traded fund launched on 12/28/2007.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

The fund is sponsored by Invesco Powershares. It has amassed assets over $244.46 M, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Dorsey Wright Developed Markets Technical Leaders Index.

This Index includes approximately 100 companies that possess powerful relative strength characteristics and are domiciled in developed markets including, but not limited to Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, and New Zealand.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Operating expenses on an annual basis are 0.81% for this ETF, which makes it the most expensive product in the space.

PIZ's 12-month trailing dividend yield is 1.30%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Taking into account individual holdings, Wartsila Oyj Abp (WRT1V FH) accounts for about 2.85% of the fund's total assets, followed by Constellation Software Inc/canada and Csl Ltd (CSL - Free Report) .

Its top 10 holdings account for approximately 23.42% of PIZ's total assets under management.

Performance and Risk

The ETF has added about 0.54% so far this year and is up roughly 12.43% in the last one year (as of 05/05/2018). In the past 52-week period, it has traded between $24.91 and $29.67.

The fund has a beta of 0.95 and standard deviation of 14.89% for the trailing three-year period, which makes PIZ a medium choice in this particular space. With about 101 holdings, it effectively diversifies company-specific risk.

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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