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Is PowerShares Dynamic Semiconductors Portfolio (PSI) a Hot ETF Right Now?
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Launched on 06/23/2005, the PowerShares Dynamic Semiconductors Portfolio (PSI - Free Report) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs category of the U.S. equity market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco Powershares. PSI has been able to amass assets over $355.81 M, making it one of the average sized ETFs in the Technology ETFs. This particular fund seeks to match the performance of the Dynamic Semiconductor Intellidex Index before fees and expenses.
The index is comprised of stocks of semiconductor companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
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.
Operating expenses on an annual basis are 0.63% for PSI, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.19%.
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.
PSI's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.
When you look at individual holdings, Intel Corp (INTC - Free Report) accounts for about 5.85% of the fund's total assets, followed by Micron Technology Inc (MU - Free Report) and Texas Instruments Inc (TXN - Free Report) .
PSI's top 10 holdings account for about 45.68% of its total assets under management.
Performance and Risk
So far this year, the ETF return is roughly 8.46%, and it's up approximately 23.33% in the last one year (as of 05/25/2018). PSI has traded between $41.30 and $57.37 in the past 52-week period.
PSI has a beta of 1.26 and standard deviation of 22.90% for the trailing three-year period, which makes the fund a high choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
PowerShares Dynamic Semiconductors Portfolio is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
VanEck Vectors Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index and the iShares PHLX Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index. VanEck Vectors Semiconductor ETF has $1.54 B in assets, iShares PHLX Semiconductor ETF has $1.68 B. SMH has an expense ratio of 0.35% and SOXX charges 0.48%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
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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Is PowerShares Dynamic Semiconductors Portfolio (PSI) a Hot ETF Right Now?
Launched on 06/23/2005, the PowerShares Dynamic Semiconductors Portfolio (PSI - Free Report) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs category of the U.S. equity market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco Powershares. PSI has been able to amass assets over $355.81 M, making it one of the average sized ETFs in the Technology ETFs. This particular fund seeks to match the performance of the Dynamic Semiconductor Intellidex Index before fees and expenses.
The index is comprised of stocks of semiconductor companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
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.
Operating expenses on an annual basis are 0.63% for PSI, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.19%.
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.
PSI's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.
When you look at individual holdings, Intel Corp (INTC - Free Report) accounts for about 5.85% of the fund's total assets, followed by Micron Technology Inc (MU - Free Report) and Texas Instruments Inc (TXN - Free Report) .
PSI's top 10 holdings account for about 45.68% of its total assets under management.
Performance and Risk
So far this year, the ETF return is roughly 8.46%, and it's up approximately 23.33% in the last one year (as of 05/25/2018). PSI has traded between $41.30 and $57.37 in the past 52-week period.
PSI has a beta of 1.26 and standard deviation of 22.90% for the trailing three-year period, which makes the fund a high choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
PowerShares Dynamic Semiconductors Portfolio is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
VanEck Vectors Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index and the iShares PHLX Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index. VanEck Vectors Semiconductor ETF has $1.54 B in assets, iShares PHLX Semiconductor ETF has $1.68 B. SMH has an expense ratio of 0.35% and SOXX charges 0.48%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
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.