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Is Invesco DWA Emerging Markets Momentum ETF (PIE) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco DWA Emerging Markets Momentum ETF (PIE - Free Report) debuted on 12/28/2007, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Because the fund has amassed over $209.16 million, this makes it one of the average sized ETFs in the Broad Emerging Market ETFs. PIE is managed by Invesco. PIE, before fees and expenses, seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index.
This Index is comprised of equity securities from countries deemed to have emerging economies, selected pursuant to a proprietary selection methodology designed to identify companies that demonstrate powerful relative strength characteristics. Index consisted of 100 securities of companies domiciled in Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hong Kong, Hungary, India ect.
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 0.90% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.19%.
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.
Taking into account individual holdings, Ap Memory Technology Corp accounts for about 4.22% of the fund's total assets, followed by China Meidong Auto Holdings Ltd and Frontken Corp Bhd (FRCB).
The top 10 holdings account for about 26.1% of total assets under management.
Performance and Risk
The ETF has gained about 8.26% so far this year and is up roughly 17.14% in the last one year (as of 12/15/2021). In the past 52-week period, it has traded between $21.98 and $27.67.
PIE has a beta of 0.81 and standard deviation of 25.22% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 114 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco DWA Emerging Markets Momentum ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $75.23 billion in assets, Vanguard FTSE Emerging Markets ETF has $78.21 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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 Invesco DWA Emerging Markets Momentum ETF (PIE) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco DWA Emerging Markets Momentum ETF (PIE - Free Report) debuted on 12/28/2007, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Because the fund has amassed over $209.16 million, this makes it one of the average sized ETFs in the Broad Emerging Market ETFs. PIE is managed by Invesco. PIE, before fees and expenses, seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index.
This Index is comprised of equity securities from countries deemed to have emerging economies, selected pursuant to a proprietary selection methodology designed to identify companies that demonstrate powerful relative strength characteristics. Index consisted of 100 securities of companies domiciled in Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hong Kong, Hungary, India ect.
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 0.90% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.19%.
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.
Taking into account individual holdings, Ap Memory Technology Corp accounts for about 4.22% of the fund's total assets, followed by China Meidong Auto Holdings Ltd and Frontken Corp Bhd (FRCB).
The top 10 holdings account for about 26.1% of total assets under management.
Performance and Risk
The ETF has gained about 8.26% so far this year and is up roughly 17.14% in the last one year (as of 12/15/2021). In the past 52-week period, it has traded between $21.98 and $27.67.
PIE has a beta of 0.81 and standard deviation of 25.22% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 114 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco DWA Emerging Markets Momentum ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $75.23 billion in assets, Vanguard FTSE Emerging Markets ETF has $78.21 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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.