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Is PowerShares Dynamic Large Cap Growth Portfolio (PWB) a Hot ETF Right Now?
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Designed to provide broad exposure to the Large Cap ETFs category of the U.S. equity market, the PowerShares Dynamic Large Cap Growth Portfolio (PWB - Free Report) is a smart beta exchange traded fund launched on 03/03/2005.
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.
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.
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.
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
Because the fund has amassed over $572.14 M, this makes it one of the average sized ETFs in the Large Cap ETFs. PWB is managed by Invesco Powershares. Before fees and expenses, PWB seeks to match the performance of the Dynamic Large Cap Growth Intellidex Index.
The Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.
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.
Annual operating expenses for PWB are 0.57%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.62%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PWB, it has heaviest allocation in the Information Technology sector --about 40.90% of the portfolio --while Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Adobe Systems Inc (ADBE - Free Report) accounts for about 3.71% of total assets, followed by Chevron Corp (CVX - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 33.88% of PWB's total assets under management.
Performance and Risk
The ETF has gained about 5.38% so far this year and is up roughly 25.92% in the last one year (as of 04/27/2018). In the past 52-week period, it has traded between $34.84 and $45.21.
The ETF has a beta of 0.90 and standard deviation of 14.05% for the trailing three-year period, making it a medium choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
PowerShares Dynamic Large Cap Growth Portfolio is a reasonable option for investors seeking to outperform the Large Cap ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Growth ETF (IWF - Free Report) tracks Russell 1000 Growth Index and the PowerShares QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. IShares Russell 1000 Growth ETF has $40.24 B in assets, PowerShares QQQ has $59.77 B. IWF has an expense ratio of 0.20% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Large Cap 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 PowerShares Dynamic Large Cap Growth Portfolio (PWB) a Hot ETF Right Now?
Designed to provide broad exposure to the Large Cap ETFs category of the U.S. equity market, the PowerShares Dynamic Large Cap Growth Portfolio (PWB - Free Report) is a smart beta exchange traded fund launched on 03/03/2005.
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.
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.
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.
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
Because the fund has amassed over $572.14 M, this makes it one of the average sized ETFs in the Large Cap ETFs. PWB is managed by Invesco Powershares. Before fees and expenses, PWB seeks to match the performance of the Dynamic Large Cap Growth Intellidex Index.
The Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.
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.
Annual operating expenses for PWB are 0.57%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.62%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PWB, it has heaviest allocation in the Information Technology sector --about 40.90% of the portfolio --while Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Adobe Systems Inc (ADBE - Free Report) accounts for about 3.71% of total assets, followed by Chevron Corp (CVX - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 33.88% of PWB's total assets under management.
Performance and Risk
The ETF has gained about 5.38% so far this year and is up roughly 25.92% in the last one year (as of 04/27/2018). In the past 52-week period, it has traded between $34.84 and $45.21.
The ETF has a beta of 0.90 and standard deviation of 14.05% for the trailing three-year period, making it a medium choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
PowerShares Dynamic Large Cap Growth Portfolio is a reasonable option for investors seeking to outperform the Large Cap ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Growth ETF (IWF - Free Report) tracks Russell 1000 Growth Index and the PowerShares QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. IShares Russell 1000 Growth ETF has $40.24 B in assets, PowerShares QQQ has $59.77 B. IWF has an expense ratio of 0.20% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Large Cap 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.