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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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is sponsored by Invesco. It has amassed assets over $259.12 million, making it one of the average sized ETFs in the Industrials ETFs. PIO 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
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.
Operating expenses on an annual basis are 0.75% for PIO, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.08%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Pentair Plc (PNR - Free Report) accounts for about 9.27% of the fund's total assets, followed by Danaher Corp (DHR - Free Report) and Roper Technologies Inc (ROP - Free Report) .
Its top 10 holdings account for approximately 58.7% of PIO's total assets under management.
Performance and Risk
So far this year, PIO has added about 7.11%, and is up about 10.45% in the last one year (as of 09/14/2023). During this past 52-week period, the fund has traded between $28.37 and $37.04.
The fund has a beta of 0.97 and standard deviation of 18.06% for the trailing three-year period, which makes PIO a medium risk choice in this particular space. With about 44 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 $1.38 billion in assets, Invesco Water Resources ETF has $1.82 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is sponsored by Invesco. It has amassed assets over $259.12 million, making it one of the average sized ETFs in the Industrials ETFs. PIO 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
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.
Operating expenses on an annual basis are 0.75% for PIO, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.08%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Pentair Plc (PNR - Free Report) accounts for about 9.27% of the fund's total assets, followed by Danaher Corp (DHR - Free Report) and Roper Technologies Inc (ROP - Free Report) .
Its top 10 holdings account for approximately 58.7% of PIO's total assets under management.
Performance and Risk
So far this year, PIO has added about 7.11%, and is up about 10.45% in the last one year (as of 09/14/2023). During this past 52-week period, the fund has traded between $28.37 and $37.04.
The fund has a beta of 0.97 and standard deviation of 18.06% for the trailing three-year period, which makes PIO a medium risk choice in this particular space. With about 44 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 $1.38 billion in assets, Invesco Water Resources ETF has $1.82 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.