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Should You Invest in the Invesco Dynamic Software ETF (PSJ)?
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Designed to provide broad exposure to the Technology - Software segment of the equity market, the Invesco Dynamic Software ETF is a passively managed exchange traded fund launched on 06/23/2005.
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.
Investor-friendly, sector ETFs provide many options 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 7, placing it in top 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $291.26 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 Dynamic Software Intellidex 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
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 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 7.02%.
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.
This ETF has heaviest allocation in the Information Technology sector--about 51.80% 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 -10.60% so far this year and is down about -34.80% in the last one year (as of 02/15/2022). In that past 52-week period, it has traded between $101.38 and $183.87.
The ETF has a beta of 1.02 and standard deviation of 28.63% 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 good 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 $320.56 million in assets, iShares Expanded TechSoftware Sector ETF has $5.34 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)?
Designed to provide broad exposure to the Technology - Software segment of the equity market, the Invesco Dynamic Software ETF is a passively managed exchange traded fund launched on 06/23/2005.
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.
Investor-friendly, sector ETFs provide many options 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 7, placing it in top 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $291.26 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 Dynamic Software Intellidex 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
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 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 7.02%.
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.
This ETF has heaviest allocation in the Information Technology sector--about 51.80% 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 -10.60% so far this year and is down about -34.80% in the last one year (as of 02/15/2022). In that past 52-week period, it has traded between $101.38 and $183.87.
The ETF has a beta of 1.02 and standard deviation of 28.63% 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 good 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 $320.56 million in assets, iShares Expanded TechSoftware Sector ETF has $5.34 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.