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Invesco Dynamic Software ETF topped the list of the best-performing ETFs of 2018, with impressive returns of about 16.4%.
Though the broad technology sector has witnessed bumpy ride throughout the year, marked by sharp sell-offs on several occasions, software corner remained the hot spot. This is especially true as the rapid adoption of cutting-edge technology such as cloud, Internet of Things, gaming, wearables, drones, virtual reality devices, artificial intelligence, machine learning and other advanced information technologies is boosting growth for the software industry (read: 4 Sector ETFs Surviving the Market Rout in 2018).
The software industry is driving most of the global IT spending, which is projected to grow 4.5% in 2018 and 3.2% in 2019, per Gartner. Enterprise software spending will likely grow 9.9% in 2018 and 8.3% in 2019, buoyed by software as a service.
Let’s take a closer look at the fundamentals of PSJ.
PSJ in Focus
This ETF offers exposure to 30 companies that are principally engaged in the research, design, production or distribution of products or processes that relate to software applications and systems and information-based services. It tracks the Intellidex Index, which is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value.
The product has amassed $229.3 million in its asset base and trades in solid volume of around 49,000 shares a day. It charges investors 63 basis points (bps) in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Biggest ETF Stories of 2018 Worth Watching in 2019).
Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars, having more than doubled or nearly doubled in 2018. Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best Performing Stocks of PSJ
Twilio Inc. (TWLO - Free Report) : The stock has surged about 278.4% last year. It currently carries a Zacks Rank #2 and has a VGM Score of D. The stock has an estimated earnings growth rate of 157.89% for 2018. It occupies the 19th spot in the fund’s basket with 2.8% of the total assets (read: A Look at the Christmas Tree of Top-Ranked ETFs).
The Trade Desk Inc. (TTD - Free Report) : This stock takes the #30 position in the fund’s basket with 2.4% allocation. It has also delivered a whopping return of 153.4% in 2018. The stock has an estimated earnings growth of 49.38%. Trade Desk has a Zacks Rank #3 (Hold) and a VGM Score of D.
Glu Mobile Inc. : This stock takes the ninth spot in the fund’s basket, with 3.2% of the assets. It has gained 121.7% last year and has an estimated earnings growth of 159.1% for 2018. Glu Mobile carries a Zacks Rank #2 and a VGM Score of C.
Coupa Software Inc. : The stock is up nearly 101.3% in 2018. It carries a Zacks Rank #2 and a VGM Score of C. The stock has an estimated earnings growth of 157.1% for fiscal year (ending January 2019). The stock occupies the 13th position and accounts for 52.94% share in PSJ.
SecureWorks Corp. (SCWX - Free Report) : The stock has risen about 90.4% last year and has an expected earnings growth rate of 102.9% for fiscal year (ending January 2019). SCWX currently has a Zacks Rank #1 and a VGM Score of C. The stock occupies the #21 position in the fund’s portfolio, making up for 2.7% share. You can see the complete list of today’s Zacks #1 Rank stocks here.
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5 Best Performing Stocks of the Top ETF of 2018
Invesco Dynamic Software ETF topped the list of the best-performing ETFs of 2018, with impressive returns of about 16.4%.
Though the broad technology sector has witnessed bumpy ride throughout the year, marked by sharp sell-offs on several occasions, software corner remained the hot spot. This is especially true as the rapid adoption of cutting-edge technology such as cloud, Internet of Things, gaming, wearables, drones, virtual reality devices, artificial intelligence, machine learning and other advanced information technologies is boosting growth for the software industry (read: 4 Sector ETFs Surviving the Market Rout in 2018).
The software industry is driving most of the global IT spending, which is projected to grow 4.5% in 2018 and 3.2% in 2019, per Gartner. Enterprise software spending will likely grow 9.9% in 2018 and 8.3% in 2019, buoyed by software as a service.
Let’s take a closer look at the fundamentals of PSJ.
PSJ in Focus
This ETF offers exposure to 30 companies that are principally engaged in the research, design, production or distribution of products or processes that relate to software applications and systems and information-based services. It tracks the Intellidex Index, which is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value.
The product has amassed $229.3 million in its asset base and trades in solid volume of around 49,000 shares a day. It charges investors 63 basis points (bps) in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Biggest ETF Stories of 2018 Worth Watching in 2019).
Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars, having more than doubled or nearly doubled in 2018. Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best Performing Stocks of PSJ
Twilio Inc. (TWLO - Free Report) : The stock has surged about 278.4% last year. It currently carries a Zacks Rank #2 and has a VGM Score of D. The stock has an estimated earnings growth rate of 157.89% for 2018. It occupies the 19th spot in the fund’s basket with 2.8% of the total assets (read: A Look at the Christmas Tree of Top-Ranked ETFs).
The Trade Desk Inc. (TTD - Free Report) : This stock takes the #30 position in the fund’s basket with 2.4% allocation. It has also delivered a whopping return of 153.4% in 2018. The stock has an estimated earnings growth of 49.38%. Trade Desk has a Zacks Rank #3 (Hold) and a VGM Score of D.
Glu Mobile Inc. : This stock takes the ninth spot in the fund’s basket, with 3.2% of the assets. It has gained 121.7% last year and has an estimated earnings growth of 159.1% for 2018. Glu Mobile carries a Zacks Rank #2 and a VGM Score of C.
Coupa Software Inc. : The stock is up nearly 101.3% in 2018. It carries a Zacks Rank #2 and a VGM Score of C. The stock has an estimated earnings growth of 157.1% for fiscal year (ending January 2019). The stock occupies the 13th position and accounts for 52.94% share in PSJ.
SecureWorks Corp. (SCWX - Free Report) : The stock has risen about 90.4% last year and has an expected earnings growth rate of 102.9% for fiscal year (ending January 2019). SCWX currently has a Zacks Rank #1 and a VGM Score of C. The stock occupies the #21 position in the fund’s portfolio, making up for 2.7% share. You can see the complete list of today’s Zacks #1 Rank stocks here.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>