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Is Invesco DWA Emerging Markets Momentum ETF (PIE) a Strong ETF Right Now?
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The Invesco DWA Emerging Markets Momentum ETF (PIE - Free Report) was launched on 12/28/2007, and is a smart beta exchange traded fund designed to offer 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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, PIE has amassed assets over $217.49 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index before fees and expenses.
The Dorsey Wright Emerging Markets Technical Leaders Index includes approximately 100 companies from the Nasdaq Emerging Markets Index that possess powerful relative strength characteristics and are domiciled in emerging market countries including, but not limited to Brazil, Chile, China, India, Indonesia, Philippines, South Africa, Thailand and Turkey.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.90%, making it one of the most expensive products in the space.
PIE's 12-month trailing dividend yield is 1.36%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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).
Its top 10 holdings account for approximately 26.1% of PIE's total assets under management.
Performance and Risk
The ETF has lost about -5.81% so far this year and is down about -5.92% in the last one year (as of 02/14/2022). In the past 52-week period, it has traded between $23.03 and $27.67.
The fund has a beta of 0.82 and standard deviation of 25.14% for the trailing three-year period, which makes PIE a medium risk choice in this particular 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 $76.24 billion in assets, Vanguard FTSE Emerging Markets ETF has $81.58 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?
The Invesco DWA Emerging Markets Momentum ETF (PIE - Free Report) was launched on 12/28/2007, and is a smart beta exchange traded fund designed to offer 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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, PIE has amassed assets over $217.49 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index before fees and expenses.
The Dorsey Wright Emerging Markets Technical Leaders Index includes approximately 100 companies from the Nasdaq Emerging Markets Index that possess powerful relative strength characteristics and are domiciled in emerging market countries including, but not limited to Brazil, Chile, China, India, Indonesia, Philippines, South Africa, Thailand and Turkey.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.90%, making it one of the most expensive products in the space.
PIE's 12-month trailing dividend yield is 1.36%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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).
Its top 10 holdings account for approximately 26.1% of PIE's total assets under management.
Performance and Risk
The ETF has lost about -5.81% so far this year and is down about -5.92% in the last one year (as of 02/14/2022). In the past 52-week period, it has traded between $23.03 and $27.67.
The fund has a beta of 0.82 and standard deviation of 25.14% for the trailing three-year period, which makes PIE a medium risk choice in this particular 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 $76.24 billion in assets, Vanguard FTSE Emerging Markets ETF has $81.58 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.