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Wall Street has been showing strong momentum in recent months, fueled by stronger-than-expected corporate earnings and hopes that the economy can avoid a recession even as the Federal Reserve raises rates to tame inflation. However, deteriorating housing conditions and any aggressive action by the Fed will continue to weigh.
Against this backdrop, momentum investing would be a winning strategy for those seeking higher returns in a short spell. While momentum has been felt in most of the corners of the market, Invesco DWA Energy Momentum ETF (PXI - Free Report) , Invesco DWA Technology Momentum ETF (PTF - Free Report) , Invesco DWA SmallCap Momentum ETF (DWAS - Free Report) , Invesco DWA Industrials Momentum ETF (PRN - Free Report) and Invesco DWA Basic Materials Momentum ETF (PYZ - Free Report) are leading the space over the past month.
The strategy seeks to capitalize on the continuance of an existing market trend. It looks to fetch profits from buying hot stocks that have shown an uptrend over the past few weeks or months.
The S&P 500 bounced back around 15% from the mid-June low while the Dow Jones reclaimed the 34,000 level. The Nasdaq Composite Index entered a bull market earlier this month. The slowdown in inflation last month brought much-needed relief to the stock market and perked up investor sentiment. This, coupled with recession fears, has spurred bets that the Fed could start lowering the pace of rate hikes. The consumer price index jumped 8.5% year over year in July, down from a 9.1% year-over-year increase in June, which was the fastest increase since November 1981 (read: Dow Jones Reclaims 34,000: ETFs to Ride On).
Additionally, consumer sentiment improved in August from a record low earlier this summer. The University of Michigan’s preliminary sentiment index rose to a three-month high of 55.1 from 51.5 in July. Further, commodity prices have also fallen on recessionary fears, providing a boost to investors’ sentiment.
Invesco DWA Energy Momentum ETF (PXI - Free Report) – Up 18.9%
Invesco DWA Energy Momentum ETF targets the broad energy sector and tracks the Dorsey Wright Energy Technical Leaders Index, which is designed to identify companies that are showing relative strength (momentum). The fund has 36 stocks in its basket with AUM of $212.7 million (read: More Pain Ahead for Energy ETFs?).
Invesco DWA Energy Momentum ETF charges 60 bps in annual fees and trades in a good volume of 52,000 shares a day on average. PXI has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Invesco DWA Technology Momentum ETF (PTF - Free Report) – Up 18.2%
Invesco DWA Technology Momentum ETF offers exposure to the 40 tech companies that are showing relative strength (momentum) by tracking the Dorsey Wright Technology Technical Leaders Index. Semiconductor & equipment takes the largest share at 30.7%, followed by technology, hardware, storage and peripherals (16.9%), and software (16.5%).
Invesco DWA Technology Momentum ETF is relatively illiquid and unpopular, with AUM of $229.1 million and an average daily volume of 9,000 shares. The fund charges 60 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
Invesco DWA SmallCap Momentum ETF (DWAS - Free Report) – Up 17.2%
With AUM of $406.4 million, Invesco DWA SmallCap Momentum ETF offers exposure to the small-cap segment of the broad U.S. stock market with positive relative strength characteristics. It follows the Dorsey Wright SmallCap Technical Leaders Index, charging 60 bps in annual fees per year. Invesco DWA SmallCap Momentum ETF is skewed toward energy sector at 24.4%, while industrials, financials, healthcare and consumer discretionary round off the next spots with double-digit exposure each.
Invesco DWA SmallCap Momentum ETF holds 201 stocks in its basket and trades in an average volume of 34,000 shares (read: Should You Buy Small Cap ETFs Now?).
Invesco DWA Industrials Momentum ETF (PRN - Free Report) – Up 16.6%
Invesco DWA Industrials Momentum ETF provides exposure to 43 industrial companies that are showing relative strength (momentum). It is widely spread across trading companies, commercial services, construction & engineering, and road and rail.
Invesco DWA Industrials Momentum ETF has accumulated $125.2 million in its asset base and charges 60 bps in annual fees. It trades in an average daily volume of 4,000 shares and has a Zacks ETF Rank #2.
Invesco DWA Basic Materials Momentum ETF (PYZ - Free Report) – Up 16.5%
Invesco DWA Basic Materials Momentum ETF tracks the Dorsey Wright Basic Materials Technical Leaders Index, giving investors exposure to 42 materials stocks showing relative strength (momentum). Chemicals dominates the fund’s returns at 59.7%, while metals & mining accounts for 32.3% of the portfolio.
Invesco DWA Basic Materials Momentum ETF has amassed $122.7 million in its asset base while charging 60 bps in fees and expenses. Volume is paltry as it exchanges nearly 27,000 shares in hand a day. Invesco DWA Basic Materials Momentum ETF has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
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5 Momentum ETFs Riding on the Surge in Market
Wall Street has been showing strong momentum in recent months, fueled by stronger-than-expected corporate earnings and hopes that the economy can avoid a recession even as the Federal Reserve raises rates to tame inflation. However, deteriorating housing conditions and any aggressive action by the Fed will continue to weigh.
Against this backdrop, momentum investing would be a winning strategy for those seeking higher returns in a short spell. While momentum has been felt in most of the corners of the market, Invesco DWA Energy Momentum ETF (PXI - Free Report) , Invesco DWA Technology Momentum ETF (PTF - Free Report) , Invesco DWA SmallCap Momentum ETF (DWAS - Free Report) , Invesco DWA Industrials Momentum ETF (PRN - Free Report) and Invesco DWA Basic Materials Momentum ETF (PYZ - Free Report) are leading the space over the past month.
The strategy seeks to capitalize on the continuance of an existing market trend. It looks to fetch profits from buying hot stocks that have shown an uptrend over the past few weeks or months.
The S&P 500 bounced back around 15% from the mid-June low while the Dow Jones reclaimed the 34,000 level. The Nasdaq Composite Index entered a bull market earlier this month. The slowdown in inflation last month brought much-needed relief to the stock market and perked up investor sentiment. This, coupled with recession fears, has spurred bets that the Fed could start lowering the pace of rate hikes. The consumer price index jumped 8.5% year over year in July, down from a 9.1% year-over-year increase in June, which was the fastest increase since November 1981 (read: Dow Jones Reclaims 34,000: ETFs to Ride On).
Additionally, consumer sentiment improved in August from a record low earlier this summer. The University of Michigan’s preliminary sentiment index rose to a three-month high of 55.1 from 51.5 in July. Further, commodity prices have also fallen on recessionary fears, providing a boost to investors’ sentiment.
Invesco DWA Energy Momentum ETF (PXI - Free Report) – Up 18.9%
Invesco DWA Energy Momentum ETF targets the broad energy sector and tracks the Dorsey Wright Energy Technical Leaders Index, which is designed to identify companies that are showing relative strength (momentum). The fund has 36 stocks in its basket with AUM of $212.7 million (read: More Pain Ahead for Energy ETFs?).
Invesco DWA Energy Momentum ETF charges 60 bps in annual fees and trades in a good volume of 52,000 shares a day on average. PXI has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Invesco DWA Technology Momentum ETF (PTF - Free Report) – Up 18.2%
Invesco DWA Technology Momentum ETF offers exposure to the 40 tech companies that are showing relative strength (momentum) by tracking the Dorsey Wright Technology Technical Leaders Index. Semiconductor & equipment takes the largest share at 30.7%, followed by technology, hardware, storage and peripherals (16.9%), and software (16.5%).
Invesco DWA Technology Momentum ETF is relatively illiquid and unpopular, with AUM of $229.1 million and an average daily volume of 9,000 shares. The fund charges 60 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
Invesco DWA SmallCap Momentum ETF (DWAS - Free Report) – Up 17.2%
With AUM of $406.4 million, Invesco DWA SmallCap Momentum ETF offers exposure to the small-cap segment of the broad U.S. stock market with positive relative strength characteristics. It follows the Dorsey Wright SmallCap Technical Leaders Index, charging 60 bps in annual fees per year. Invesco DWA SmallCap Momentum ETF is skewed toward energy sector at 24.4%, while industrials, financials, healthcare and consumer discretionary round off the next spots with double-digit exposure each.
Invesco DWA SmallCap Momentum ETF holds 201 stocks in its basket and trades in an average volume of 34,000 shares (read: Should You Buy Small Cap ETFs Now?).
Invesco DWA Industrials Momentum ETF (PRN - Free Report) – Up 16.6%
Invesco DWA Industrials Momentum ETF provides exposure to 43 industrial companies that are showing relative strength (momentum). It is widely spread across trading companies, commercial services, construction & engineering, and road and rail.
Invesco DWA Industrials Momentum ETF has accumulated $125.2 million in its asset base and charges 60 bps in annual fees. It trades in an average daily volume of 4,000 shares and has a Zacks ETF Rank #2.
Invesco DWA Basic Materials Momentum ETF (PYZ - Free Report) – Up 16.5%
Invesco DWA Basic Materials Momentum ETF tracks the Dorsey Wright Basic Materials Technical Leaders Index, giving investors exposure to 42 materials stocks showing relative strength (momentum). Chemicals dominates the fund’s returns at 59.7%, while metals & mining accounts for 32.3% of the portfolio.
Invesco DWA Basic Materials Momentum ETF has amassed $122.7 million in its asset base while charging 60 bps in fees and expenses. Volume is paltry as it exchanges nearly 27,000 shares in hand a day. Invesco DWA Basic Materials Momentum ETF has a Zacks ETF Rank #3 (Hold) with a High risk outlook.