Designed to provide broad exposure to the Utilities - Broad segment of the equity market, the Invesco DWA Utilities Momentum ETF (PUI - Free Report) is a passively managed exchange traded fund launched on 10/26/2005.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
The fund is sponsored by Invesco. It has amassed assets over $240.12 M, making it one of the average sized ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. PUI seeks to match the performance of the DWA Utilities Technical Leaders Index before fees and expenses.
The DWA Utilities Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.60%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.62%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector--about 96.10% of the portfolio.
Looking at individual holdings, Wec Energy Group Inc (WEC - Free Report) accounts for about 4.21% of total assets, followed by Nextera Energy Inc (NEE - Free Report) and Cms Energy Corp (CMS - Free Report) .
The top 10 holdings account for about 39.26% of total assets under management.
Performance and Risk
The ETF has added roughly 17.79% and is up about 17.49% so far this year and in the past one year (as of 08/20/2019), respectively. PUI has traded between $28.07 and $33.82 during this last 52-week period.
The ETF has a beta of 0.28 and standard deviation of 13.83% for the trailing three-year period, making it a medium risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Invesco DWA Utilities Momentum 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, PUI is a good option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR Fund (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $3.94 B in assets, Utilities Select Sector SPDR Fund has $10.68 B. VPU has an expense ratio of 0.10% and XLU charges 0.13%.
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