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Is Invesco Dynamic Large Cap Value ETF (PWV) a Strong ETF Right Now?

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The Invesco Dynamic Large Cap Value ETF (PWV - Free Report) was launched on 03/03/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the 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.

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.

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.

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.

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

PWV is managed by Invesco, and this fund has amassed over $740.50 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the Dynamic Large Cap Value Intellidex Index.

The Dynamic Large Cap Value Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.

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.

With one of the more expensive products in the space, this ETF has annual operating expenses of 0.58%.

PWV's 12-month trailing dividend yield is 2.30%.

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.

For PWV, it has heaviest allocation in the Financials sector --about 25.50% of the portfolio --while Healthcare and Consumer Staples round out the top three.

Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 3.67% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Walmart Inc (WMT - Free Report) .

PWV's top 10 holdings account for about 34.23% of its total assets under management.

Performance and Risk

The ETF has lost about -9.23% and was up about 3.19% so far this year and in the past one year (as of 07/11/2022), respectively. PWV has traded between $42.73 and $50.64 during this last 52-week period.

The fund has a beta of 0.91 and standard deviation of 24.14% for the trailing three-year period, which makes PWV a medium risk choice in this particular space. With about 52 holdings, it effectively diversifies company-specific risk.


Invesco Dynamic Large Cap Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $51.70 billion in assets, Vanguard Value ETF has $94.39 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.

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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