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Is Invesco Dynamic Semiconductors ETF (PSI) a Strong ETF Right Now?
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The Invesco Dynamic Semiconductors ETF (PSI - Free Report) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology 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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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 $615.26 million, which makes it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, PSI 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
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 0.56%, making it on par with most peer products in the space.
PSI's 12-month trailing dividend yield is 0.31%.
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.
Representing 97% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 5.47% of the fund's total assets, followed by Qualcomm Inc (QCOM - Free Report) and Broadcom Inc (AVGO - Free Report) .
The top 10 holdings account for about 45.4% of total assets under management.
Performance and Risk
The ETF has lost about -24.83% and is down about -10.19% so far this year and in the past one year (as of 08/05/2022), respectively. PSI has traded between $92.29 and $155.95 during this last 52-week period.
The ETF has a beta of 1.34 and standard deviation of 40.38% for the trailing three-year period, making it a high risk choice in the 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 $7.29 billion in assets, iShares Semiconductor ETF has $7.52 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?
The Invesco Dynamic Semiconductors ETF (PSI - Free Report) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology 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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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 $615.26 million, which makes it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, PSI 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
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 0.56%, making it on par with most peer products in the space.
PSI's 12-month trailing dividend yield is 0.31%.
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.
Representing 97% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 5.47% of the fund's total assets, followed by Qualcomm Inc (QCOM - Free Report) and Broadcom Inc (AVGO - Free Report) .
The top 10 holdings account for about 45.4% of total assets under management.
Performance and Risk
The ETF has lost about -24.83% and is down about -10.19% so far this year and in the past one year (as of 08/05/2022), respectively. PSI has traded between $92.29 and $155.95 during this last 52-week period.
The ETF has a beta of 1.34 and standard deviation of 40.38% for the trailing three-year period, making it a high risk choice in the 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 $7.29 billion in assets, iShares Semiconductor ETF has $7.52 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.