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Is PowerShares DWA Emerging Markets Momentum Portfolio (PIE) a Hot ETF Right Now?
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Making its debut on 12/28/2007, smart beta exchange traded fund PowerShares DWA Emerging Markets Momentum Portfolio (PIE - Free Report) provides investors broad exposure to the Broad Emerging Market ETFs category of the U.S. equity market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco Powershares. It has amassed assets over $284.56 M, making it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, PIE seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index.
This Index is comprised of equity securities from countries deemed to have emerging economies, selected pursuant to a proprietary selection methodology designed to identify companies that demonstrate powerful relative strength characteristics. Index consisted of 100 securities of companies domiciled in Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hong Kong, Hungary, India ect.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.90%, making it the most expensive product in the space.
The fund has a 12-month trailing dividend yield of 1.62%.
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.
When you look at individual holdings, Magazine Luiza Sa (MGLU3) accounts for about 3.46% of the fund's total assets, followed by Hartalega Holdings Bhd (HART - Free Report) and Walsin Technology Corp (2492).
PIE's top 10 holdings account for about 25.84% of its total assets under management.
Performance and Risk
The fund's year-to-date return has gained about 0.34%, and it's up approximately 24.58% in the last one year (as of 05/02/2018). PIE has traded between $16.39 and $22.21 in the past 52-week period.
PIE has a beta of 0.95 and standard deviation of 17.99% for the trailing three-year period, which makes the fund a medium choice in the space. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
PowerShares DWA Emerging Markets Momentum Portfolio is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China An Inclusion Index. IShares Core MSCI Emerging Markets ETF has $50.25 B in assets, Vanguard FTSE Emerging Markets ETF has $66.92 B. IEMG has an expense ratio of 0.14% and VWO charges 0.14%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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 DWA Emerging Markets Momentum Portfolio (PIE) a Hot ETF Right Now?
Making its debut on 12/28/2007, smart beta exchange traded fund PowerShares DWA Emerging Markets Momentum Portfolio (PIE - Free Report) provides investors broad exposure to the Broad Emerging Market ETFs category of the U.S. equity market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco Powershares. It has amassed assets over $284.56 M, making it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, PIE seeks to match the performance of the Dorsey Wright Emerging Markets Technical Leaders Index.
This Index is comprised of equity securities from countries deemed to have emerging economies, selected pursuant to a proprietary selection methodology designed to identify companies that demonstrate powerful relative strength characteristics. Index consisted of 100 securities of companies domiciled in Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hong Kong, Hungary, India ect.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.90%, making it the most expensive product in the space.
The fund has a 12-month trailing dividend yield of 1.62%.
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.
When you look at individual holdings, Magazine Luiza Sa (MGLU3) accounts for about 3.46% of the fund's total assets, followed by Hartalega Holdings Bhd (HART - Free Report) and Walsin Technology Corp (2492).
PIE's top 10 holdings account for about 25.84% of its total assets under management.
Performance and Risk
The fund's year-to-date return has gained about 0.34%, and it's up approximately 24.58% in the last one year (as of 05/02/2018). PIE has traded between $16.39 and $22.21 in the past 52-week period.
PIE has a beta of 0.95 and standard deviation of 17.99% for the trailing three-year period, which makes the fund a medium choice in the space. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
PowerShares DWA Emerging Markets Momentum Portfolio is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China An Inclusion Index. IShares Core MSCI Emerging Markets ETF has $50.25 B in assets, Vanguard FTSE Emerging Markets ETF has $66.92 B. IEMG has an expense ratio of 0.14% and VWO charges 0.14%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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.