The Invesco NASDAQ Internet ETF (PNQI Quick QuotePNQI - Free Report) was launched on 06/12/2008, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Internet segment of the equity market.

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.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $611.58 million, making it one of the larger ETFs attempting to match the performance of the Technology - Internet segment of the equity market. PNQI seeks to match the performance of the NASDAQ Internet Index before fees and expenses.

The Nasdaq CTA Internet Index is a modified market-capitalization weighted index designed to track the performance of the largest & most liquid U.S.-listed companies engaged in internet-related businesses & that are listed on one of the three major U.S. stock exchanges.

Costs

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.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

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 Telecom sector--about 32.30% of the portfolio. Information Technology and Consumer Discretionary round out the top three.

Looking at individual holdings, Meta Platforms Inc (META Quick QuoteMETA - Free Report) accounts for about 8.97% of total assets, followed by Alphabet Inc (GOOG Quick QuoteGOOG - Free Report) and Microsoft Corp (MSFT Quick QuoteMSFT - Free Report) .

The top 10 holdings account for about 61.32% of total assets under management.

Performance and Risk

So far this year, PNQI has added about 49.90%, and it's up approximately 43.39% in the last one year (as of 11/20/2023). During this past 52-week period, the fund has traded between $21.77 and $33.70.

The ETF has a beta of 1.15 and standard deviation of 30.65% for the trailing three-year period, making it a high risk choice in the space. With about 85 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco NASDAQ Internet 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, PNQI 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.

ARK Next Generation Internet ETF (ARKW Quick QuoteARKW - Free Report) tracks N/A and the First Trust Dow Jones Internet ETF (FDN Quick QuoteFDN - Free Report) tracks Dow Jones Internet Composite Index. ARK Next Generation Internet ETF has $1.40 billion in assets, First Trust Dow Jones Internet ETF has $5 billion. ARKW has an expense ratio of 0.88% and FDN charges 0.52%.

Bottom Line

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