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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) made its debut on 12/28/2007, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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 managed by Invesco. PIE has been able to amass assets over $202.22 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.90% for PIE, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.48%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Yulon Finance Corp accounts for about 3.06% of the fund's total assets, followed by Sinbon Electronics Co Ltd and Nan Ya Printed Circuit Board Corp.
The top 10 holdings account for about 24.65% of total assets under management.
Performance and Risk
So far this year, PIE has lost about -14.80%, and is down about -13.90% in the last one year (as of 04/29/2022). During this past 52-week period, the fund has traded between $21.40 and $27.67.
PIE has a beta of 0.79 and standard deviation of 25.84% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 113 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 $69.48 billion in assets, Vanguard FTSE Emerging Markets ETF has $73.13 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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) made its debut on 12/28/2007, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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 managed by Invesco. PIE has been able to amass assets over $202.22 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.90% for PIE, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.48%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Yulon Finance Corp accounts for about 3.06% of the fund's total assets, followed by Sinbon Electronics Co Ltd and Nan Ya Printed Circuit Board Corp.
The top 10 holdings account for about 24.65% of total assets under management.
Performance and Risk
So far this year, PIE has lost about -14.80%, and is down about -13.90% in the last one year (as of 04/29/2022). During this past 52-week period, the fund has traded between $21.40 and $27.67.
PIE has a beta of 0.79 and standard deviation of 25.84% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 113 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 $69.48 billion in assets, Vanguard FTSE Emerging Markets ETF has $73.13 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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.