Designed to provide broad exposure to the Technology - Broad segment of the equity market, the Invesco S&P SmallCap Information Technology ETF (
PSCT Quick Quote PSCT - Free Report) is a passively managed exchange traded fund launched on 04/07/2010.
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.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
The fund is sponsored by Invesco. It has amassed assets over $302.09 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. PSCT seeks to match the performance of the S&P SmallCap 600 Capped Information Technology Index before fees and expenses.
The S&P SmallCap 600 Capped Information Technology Index measures the overall performance of common stocks of US information technology companies.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.29%, making it one of the least expensive products in the space.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.
Looking at individual holdings, Sps Commerce Inc (
SPSC Quick Quote SPSC - Free Report) accounts for about 4.07% of total assets, followed by Fabrinet ( FN Quick Quote FN - Free Report) and Rambus Inc ( RMBS Quick Quote RMBS - Free Report) .
The top 10 holdings account for about 31.75% of total assets under management.
Performance and Risk
The ETF has added roughly 4.21% so far this year and is down about -9.96% in the last one year (as of 03/20/2023). In that past 52-week period, it has traded between $109.76 and $143.93.
The ETF has a beta of 1.21 and standard deviation of 30.63% for the trailing three-year period, making it a high risk choice in the space. With about 71 holdings, it effectively diversifies company-specific risk.
Invesco S&P SmallCap Information Technology 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, PSCT 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.
Technology Select Sector SPDR ETF (
XLK Quick Quote XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF ( VGT Quick Quote VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $41.75 billion in assets, Vanguard Information Technology ETF has $44.40 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%. Bottom Line
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