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Should Invesco Bloomberg Pricing Power ETF (POWA) Be on Your Investing Radar?
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Launched on 12/15/2006, the Invesco Bloomberg Pricing Power ETF (POWA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $204.73 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.40%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.37%.
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 to the Industrials sector--about 24.70% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Best Buy Co Inc (BBY - Free Report) accounts for about 2.25% of total assets, followed by Cooper Cos Inc/the (COO - Free Report) and Otis Worldwide Corp (OTIS - Free Report) .
The top 10 holdings account for about 21.72% of total assets under management.
Performance and Risk
POWA seeks to match the performance of the BLOOMBERG PRICING POWER INDEX before fees and expenses. The Bloomberg Pricing Power Index composes of U.S. large and mid-capitalization companies that are well-positioned to maintain stable profit margins in all market conditions while focusing on companies that have the smallest deviations among their annual gross profit margins over the last five years.
The ETF has gained about 16.97% so far this year and is up about 32.70% in the last one year (as of 10/22/2024). In the past 52-week period, it has traded between $63.22 and $85.75.
The ETF has a beta of 0.86 and standard deviation of 11.07% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Bloomberg Pricing Power ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, POWA is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $143.43 billion in assets, Invesco QQQ has $298.72 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
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.
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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Should Invesco Bloomberg Pricing Power ETF (POWA) Be on Your Investing Radar?
Launched on 12/15/2006, the Invesco Bloomberg Pricing Power ETF (POWA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $204.73 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.40%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.37%.
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 to the Industrials sector--about 24.70% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Best Buy Co Inc (BBY - Free Report) accounts for about 2.25% of total assets, followed by Cooper Cos Inc/the (COO - Free Report) and Otis Worldwide Corp (OTIS - Free Report) .
The top 10 holdings account for about 21.72% of total assets under management.
Performance and Risk
POWA seeks to match the performance of the BLOOMBERG PRICING POWER INDEX before fees and expenses. The Bloomberg Pricing Power Index composes of U.S. large and mid-capitalization companies that are well-positioned to maintain stable profit margins in all market conditions while focusing on companies that have the smallest deviations among their annual gross profit margins over the last five years.
The ETF has gained about 16.97% so far this year and is up about 32.70% in the last one year (as of 10/22/2024). In the past 52-week period, it has traded between $63.22 and $85.75.
The ETF has a beta of 0.86 and standard deviation of 11.07% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Bloomberg Pricing Power ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, POWA is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $143.43 billion in assets, Invesco QQQ has $298.72 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
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.
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.