For investors seeking momentum, Invesco DWA Utilities Momentum ETF (PUI - Free Report) is probably on radar now. The fund just hit a 52-week high and is up more than 27% from its 52-week low price of $23.64/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
PUI in Focus
The fund is based on the Dorsey Wright Utilities Technical Leaders Index. The index is designed to identify companies that are showing relative strength (momentum), and is composed of at least 30 securities from the NASDAQ U.S. Benchmark Index. The fund charges 60 bps in fees (see all Utilities/Infrastructure ETFs here).
Why the Move?
There was a bloodbath in the market triggered by a slump in Apple and Goldman shares. This brought down the treasury yields as investors sought safety. Since yields came down, rate-sensitive sectors like utility performed better. Investors should note that since the utility sector offers a high dividend yield and generally bears huge debt, it outperforms in a falling rate environment.
More Gains Ahead?
It seems that the fund might stay strong given a positive weighted alpha of 6.60. There is still some promise for investors who want to ride on this surging ETF.
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