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Is Invesco Global Water ETF (PIO) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco Global Water ETF (PIO - Free Report) debuted on 06/13/2007, and offers broad exposure to the Industrials 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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
The fund is managed by Invesco. PIO has been able to amass assets over $281.14 million, making it one of the average sized ETFs in the Industrials ETFs. PIO, before fees and expenses, seeks to match the performance of the NASDAQ OMX Global Water Index.
The NASDAQ OMX Global Water Index is designed to track the performance of companies worldwide that are creating products that conserve and purify water for homes, businesses and industries.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for PIO are 0.75%, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.96%.
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.
Looking at individual holdings, Ferguson Plc (FERG - Free Report) accounts for about 9.09% of total assets, followed by Roper Technologies Inc (ROP - Free Report) and Danaher Corp (DHR - Free Report) .
The top 10 holdings account for about 24.63% of total assets under management.
Performance and Risk
The ETF has gained about 6.68% and is down about -2.92% so far this year and in the past one year (as of 02/24/2023), respectively. PIO has traded between $28.37 and $37.29 during this last 52-week period.
The fund has a beta of 0.96 and standard deviation of 24.60% for the trailing three-year period, which makes PIO a medium risk choice in this particular space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Global Water ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
First Trust Water ETF (FIW - Free Report) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF (PHO - Free Report) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.30 billion in assets, Invesco Water Resources ETF has $1.79 billion. FIW has an expense ratio of 0.53% and PHO charges 0.59%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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 Global Water ETF (PIO) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco Global Water ETF (PIO - Free Report) debuted on 06/13/2007, and offers broad exposure to the Industrials 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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
The fund is managed by Invesco. PIO has been able to amass assets over $281.14 million, making it one of the average sized ETFs in the Industrials ETFs. PIO, before fees and expenses, seeks to match the performance of the NASDAQ OMX Global Water Index.
The NASDAQ OMX Global Water Index is designed to track the performance of companies worldwide that are creating products that conserve and purify water for homes, businesses and industries.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for PIO are 0.75%, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.96%.
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.
Looking at individual holdings, Ferguson Plc (FERG - Free Report) accounts for about 9.09% of total assets, followed by Roper Technologies Inc (ROP - Free Report) and Danaher Corp (DHR - Free Report) .
The top 10 holdings account for about 24.63% of total assets under management.
Performance and Risk
The ETF has gained about 6.68% and is down about -2.92% so far this year and in the past one year (as of 02/24/2023), respectively. PIO has traded between $28.37 and $37.29 during this last 52-week period.
The fund has a beta of 0.96 and standard deviation of 24.60% for the trailing three-year period, which makes PIO a medium risk choice in this particular space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Global Water ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
First Trust Water ETF (FIW - Free Report) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF (PHO - Free Report) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.30 billion in assets, Invesco Water Resources ETF has $1.79 billion. FIW has an expense ratio of 0.53% and PHO charges 0.59%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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.