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Should You Invest in the Invesco Dynamic Software ETF (PSJ)?
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If you're interested in broad exposure to the Technology - Software segment of the equity market, look no further than the Invesco Dynamic Software ETF , a passively managed exchange traded fund launched on 06/23/2005.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $226.99 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. PSJ seeks to match the performance of the Dynamic Software Intellidex Index before fees and expenses.
The Dynamic Software Intellidex Index is comprised of stocks of software 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.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.69%.
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.
This ETF has heaviest allocation in the Information Technology sector--about 68.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Roblox Corp (RBLX - Free Report) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG - Free Report) and Cadence Design Systems Inc (CDNS - Free Report) .
The top 10 holdings account for about 48.46% of total assets under management.
Performance and Risk
The ETF has lost about -17.90% and is down about -25.16% so far this year and in the past one year (as of 08/22/2022), respectively. PSJ has traded between $86.93 and $157.78 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 30.81% 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 Software ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PSJ is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&P Software & Services ETF (XSW - Free Report) tracks S&P Software & Services Select Industry Index and the iShares Expanded TechSoftware Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. SPDR S&P Software & Services ETF has $237.37 million in assets, iShares Expanded TechSoftware Sector ETF has $4.64 billion. XSW has an expense ratio of 0.35% and IGV charges 0.40%.
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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Should You Invest in the Invesco Dynamic Software ETF (PSJ)?
If you're interested in broad exposure to the Technology - Software segment of the equity market, look no further than the Invesco Dynamic Software ETF , a passively managed exchange traded fund launched on 06/23/2005.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $226.99 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. PSJ seeks to match the performance of the Dynamic Software Intellidex Index before fees and expenses.
The Dynamic Software Intellidex Index is comprised of stocks of software 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.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.69%.
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.
This ETF has heaviest allocation in the Information Technology sector--about 68.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Roblox Corp (RBLX - Free Report) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG - Free Report) and Cadence Design Systems Inc (CDNS - Free Report) .
The top 10 holdings account for about 48.46% of total assets under management.
Performance and Risk
The ETF has lost about -17.90% and is down about -25.16% so far this year and in the past one year (as of 08/22/2022), respectively. PSJ has traded between $86.93 and $157.78 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 30.81% 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 Software ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PSJ is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&P Software & Services ETF (XSW - Free Report) tracks S&P Software & Services Select Industry Index and the iShares Expanded TechSoftware Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. SPDR S&P Software & Services ETF has $237.37 million in assets, iShares Expanded TechSoftware Sector ETF has $4.64 billion. XSW has an expense ratio of 0.35% and IGV charges 0.40%.
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.