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Is Invesco Dynamic Semiconductors ETF (PSI) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco Dynamic Semiconductors ETF (PSI - Free Report) debuted on 06/23/2005, and offers broad exposure to the Technology ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $786.30 million, which makes it one of the average sized ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Semiconductor Intellidex Index.
The Dynamic Semiconductor Intellidex 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
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.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.23%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For PSI, it has heaviest allocation in the Information Technology sector --about 97.50% of the portfolio.
Taking into account individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 5.44% of the fund's total assets, followed by Kla Corp (KLAC - Free Report) and Broadcom Inc (AVGO - Free Report) .
Its top 10 holdings account for approximately 45.69% of PSI's total assets under management.
Performance and Risk
The ETF has lost about -13.73% and is up about 18.40% so far this year and in the past one year (as of 03/28/2022), respectively. PSI has traded between $108.80 and $155.95 during this last 52-week period.
The fund has a beta of 1.26 and standard deviation of 38.44% for the trailing three-year period, which makes PSI a high risk choice in this particular space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Semiconductors ETF 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 Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index and the iShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index. VanEck Semiconductor ETF has $9.01 billion in assets, iShares Semiconductor ETF has $9.29 billion. SMH has an expense ratio of 0.35% and SOXX charges 0.43%.
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 Invesco Dynamic Semiconductors ETF (PSI) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco Dynamic Semiconductors ETF (PSI - Free Report) debuted on 06/23/2005, and offers broad exposure to the Technology ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $786.30 million, which makes it one of the average sized ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Semiconductor Intellidex Index.
The Dynamic Semiconductor Intellidex 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
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.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.23%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For PSI, it has heaviest allocation in the Information Technology sector --about 97.50% of the portfolio.
Taking into account individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 5.44% of the fund's total assets, followed by Kla Corp (KLAC - Free Report) and Broadcom Inc (AVGO - Free Report) .
Its top 10 holdings account for approximately 45.69% of PSI's total assets under management.
Performance and Risk
The ETF has lost about -13.73% and is up about 18.40% so far this year and in the past one year (as of 03/28/2022), respectively. PSI has traded between $108.80 and $155.95 during this last 52-week period.
The fund has a beta of 1.26 and standard deviation of 38.44% for the trailing three-year period, which makes PSI a high risk choice in this particular space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Semiconductors ETF 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 Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index and the iShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index. VanEck Semiconductor ETF has $9.01 billion in assets, iShares Semiconductor ETF has $9.29 billion. SMH has an expense ratio of 0.35% and SOXX charges 0.43%.
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.