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Is Invesco Dynamic Semiconductors ETF (PSI) a Strong ETF Right Now?
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Launched on 06/23/2005, the Invesco Dynamic Semiconductors ETF (PSI - Free Report) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PSI has amassed assets over $480.39 million, making 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
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.
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 0.49%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
PSI's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.
When you look at individual holdings, Qualcomm Inc (QCOM - Free Report) accounts for about 5.42% of the fund's total assets, followed by Nvidia Corp (NVDA - Free Report) and Advanced Micro Devices Inc (AMD - Free Report) .
Its top 10 holdings account for approximately 42.23% of PSI's total assets under management.
Performance and Risk
The ETF has lost about -36.99% so far this year and is down about -20.94% in the last one year (as of 10/05/2022). In the past 52-week period, it has traded between $89.99 and $155.95.
The ETF has a beta of 1.35 and standard deviation of 41.06% 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.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $5.92 billion in assets, VanEck Semiconductor ETF has $6.08 billion. SOXX has an expense ratio of 0.40% and SMH charges 0.35%.
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?
Launched on 06/23/2005, the Invesco Dynamic Semiconductors ETF (PSI - Free Report) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PSI has amassed assets over $480.39 million, making 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
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.
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 0.49%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
PSI's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.
When you look at individual holdings, Qualcomm Inc (QCOM - Free Report) accounts for about 5.42% of the fund's total assets, followed by Nvidia Corp (NVDA - Free Report) and Advanced Micro Devices Inc (AMD - Free Report) .
Its top 10 holdings account for approximately 42.23% of PSI's total assets under management.
Performance and Risk
The ETF has lost about -36.99% so far this year and is down about -20.94% in the last one year (as of 10/05/2022). In the past 52-week period, it has traded between $89.99 and $155.95.
The ETF has a beta of 1.35 and standard deviation of 41.06% 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.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $5.92 billion in assets, VanEck Semiconductor ETF has $6.08 billion. SOXX has an expense ratio of 0.40% and SMH charges 0.35%.
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.