If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Invesco Dorsey Wright Technology Momentum ETF (
PTF Quick Quote PTF - Free Report) , a passively managed exchange traded fund launched on 10/12/2006.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
The fund is sponsored by Invesco. It has amassed assets over $310.54 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. PTF seeks to match the performance of the DWA Technology Technical Leaders Index before fees and expenses.
The Dorsey Wright??Technology Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.
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 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.08%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that 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, Apple Inc (
AAPL Quick Quote AAPL - Free Report) accounts for about 6.17% of total assets, followed by Super Micro Computer Inc ( SMCI Quick Quote SMCI - Free Report) and Applovin Corp ( APP Quick Quote APP - Free Report) .
The top 10 holdings account for about 43.35% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Dorsey Wright Technology Momentum ETF return is roughly 17.45% so far, and is up about 16.34% over the last 12 months (as of 09/21/2023). PTF has traded between $33.82 and $51.92 in this past 52-week period.
The ETF has a beta of 1.21 and standard deviation of 35.27% for the trailing three-year period, making it a high risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Invesco Dorsey Wright Technology Momentum ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PTF 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 $48.99 billion in assets, Vanguard Information Technology ETF has $50.78 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%. Bottom Line
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Zacks ETF Center.