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Is Invesco Global Water ETF (PIO) a Strong ETF Right Now?
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Launched on 06/13/2007, the Invesco Global Water ETF (PIO - Free Report) is a smart beta exchange traded fund offering 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Invesco, PIO has amassed assets over $274.72 million, making it one of the average sized ETFs in the Industrials ETFs. This particular fund seeks to match the performance of the NASDAQ OMX Global Water Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for PIO are 0.75%, which makes it one of the most expensive products in the space.
PIO's 12-month trailing dividend yield is 1.06%.
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.
When you look at individual holdings, Roper Technologies Inc (ROP - Free Report) accounts for about 8.09% of the fund's total assets, followed by Danaher Corp (DHR - Free Report) and Pentair Plc (PNR - Free Report) .
PIO's top 10 holdings account for about 57.12% of its total assets under management.
Performance and Risk
So far this year, PIO has added about 8.46%, and it's up approximately 13.98% in the last one year (as of 06/30/2023). During this past 52-week period, the fund has traded between $28.37 and $36.59.
The ETF has a beta of 0.96 and standard deviation of 18.21% for the trailing three-year period, making it a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Global Water ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $1.39 billion in assets, Invesco Water Resources ETF has $1.85 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?
Launched on 06/13/2007, the Invesco Global Water ETF (PIO - Free Report) is a smart beta exchange traded fund offering 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Invesco, PIO has amassed assets over $274.72 million, making it one of the average sized ETFs in the Industrials ETFs. This particular fund seeks to match the performance of the NASDAQ OMX Global Water Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for PIO are 0.75%, which makes it one of the most expensive products in the space.
PIO's 12-month trailing dividend yield is 1.06%.
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.
When you look at individual holdings, Roper Technologies Inc (ROP - Free Report) accounts for about 8.09% of the fund's total assets, followed by Danaher Corp (DHR - Free Report) and Pentair Plc (PNR - Free Report) .
PIO's top 10 holdings account for about 57.12% of its total assets under management.
Performance and Risk
So far this year, PIO has added about 8.46%, and it's up approximately 13.98% in the last one year (as of 06/30/2023). During this past 52-week period, the fund has traded between $28.37 and $36.59.
The ETF has a beta of 0.96 and standard deviation of 18.21% for the trailing three-year period, making it a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Global Water ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $1.39 billion in assets, Invesco Water Resources ETF has $1.85 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.