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Should You Invest in the Invesco Dynamic Software ETF (PSJ)?
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If you're interested in broad exposure to the Technology - Software segment of the equity market, look no further than the Invesco Dynamic Software ETF , a passively managed exchange traded fund launched on 06/23/2005.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $397.22 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. PSJ seeks to match the performance of the Dynamic Software Intellidex Index before fees and expenses.
The index is comprised of stocks of software companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
Costs
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 this ETF are 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 53.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Hubspot Inc (HUBS - Free Report) accounts for about 6.16% of total assets, followed by Intuit Inc (INTU - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 49.97% of total assets under management.
Performance and Risk
The ETF has lost about -10.42% and is down about -9.70% so far this year and in the past one year (as of 12/16/2021), respectively. PSJ has traded between $133.39 and $185.30 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 28.07% for the trailing three-year period, making it a high risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Software 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, PSJ is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Software & Services ETF (XSW - Free Report) tracks S&P Software & Services Select Industry Index and the iShares Expanded TechSoftware Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. SPDR S&P Software & Services ETF has $529.90 million in assets, iShares Expanded TechSoftware Sector ETF has $5.94 billion. XSW has an expense ratio of 0.35% and IGV charges 0.43%.
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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Should You Invest in the Invesco Dynamic Software ETF (PSJ)?
If you're interested in broad exposure to the Technology - Software segment of the equity market, look no further than the Invesco Dynamic Software ETF , a passively managed exchange traded fund launched on 06/23/2005.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $397.22 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. PSJ seeks to match the performance of the Dynamic Software Intellidex Index before fees and expenses.
The index is comprised of stocks of software companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
Costs
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 this ETF are 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 53.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Hubspot Inc (HUBS - Free Report) accounts for about 6.16% of total assets, followed by Intuit Inc (INTU - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 49.97% of total assets under management.
Performance and Risk
The ETF has lost about -10.42% and is down about -9.70% so far this year and in the past one year (as of 12/16/2021), respectively. PSJ has traded between $133.39 and $185.30 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 28.07% for the trailing three-year period, making it a high risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Software 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, PSJ is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Software & Services ETF (XSW - Free Report) tracks S&P Software & Services Select Industry Index and the iShares Expanded TechSoftware Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. SPDR S&P Software & Services ETF has $529.90 million in assets, iShares Expanded TechSoftware Sector ETF has $5.94 billion. XSW has an expense ratio of 0.35% and IGV charges 0.43%.
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.