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Is Invesco Global Water ETF (PIO) a Strong ETF Right Now?
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Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco Global Water ETF (PIO - Free Report) is a smart beta exchange traded fund launched on 06/13/2007.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $272.29 million, which makes it one of the average sized ETFs in the Industrials ETFs. This particular fund, before fees and expenses, seeks to match the performance of the NASDAQ OMX Global Water Index.
The NASDAQ OMX Global Water Index is designed to track the performance of companies worldwide that are creating products that conserve and purify water for homes, businesses and industries.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for PIO are 0.75%, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.87%.
Sector Exposure and Top Holdings
ETFs offer 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.
Looking at individual holdings, Pentair Plc (PNR - Free Report) accounts for about 8.30% of total assets, followed by Veralto Corp (VLTO - Free Report) and Danaher Corp (DHR - Free Report) .
Its top 10 holdings account for approximately 54.3% of PIO's total assets under management.
Performance and Risk
The ETF has lost about -2.99% and is up about 10.08% so far this year and in the past one year (as of 01/24/2024), respectively. PIO has traded between $31.37 and $39.63 during this last 52-week period.
The fund has a beta of 1.03 and standard deviation of 18.27% for the trailing three-year period, which makes PIO a medium risk choice in this particular space. With about 47 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Global Water ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
First Trust Water ETF (FIW - Free Report) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF (PHO - Free Report) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.48 billion in assets, Invesco Water Resources ETF has $1.93 billion. FIW has an expense ratio of 0.53% and PHO charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
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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Is Invesco Global Water ETF (PIO) a Strong ETF Right Now?
Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco Global Water ETF (PIO - Free Report) is a smart beta exchange traded fund launched on 06/13/2007.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $272.29 million, which makes it one of the average sized ETFs in the Industrials ETFs. This particular fund, before fees and expenses, seeks to match the performance of the NASDAQ OMX Global Water Index.
The NASDAQ OMX Global Water Index is designed to track the performance of companies worldwide that are creating products that conserve and purify water for homes, businesses and industries.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for PIO are 0.75%, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.87%.
Sector Exposure and Top Holdings
ETFs offer 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.
Looking at individual holdings, Pentair Plc (PNR - Free Report) accounts for about 8.30% of total assets, followed by Veralto Corp (VLTO - Free Report) and Danaher Corp (DHR - Free Report) .
Its top 10 holdings account for approximately 54.3% of PIO's total assets under management.
Performance and Risk
The ETF has lost about -2.99% and is up about 10.08% so far this year and in the past one year (as of 01/24/2024), respectively. PIO has traded between $31.37 and $39.63 during this last 52-week period.
The fund has a beta of 1.03 and standard deviation of 18.27% for the trailing three-year period, which makes PIO a medium risk choice in this particular space. With about 47 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Global Water ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
First Trust Water ETF (FIW - Free Report) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF (PHO - Free Report) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.48 billion in assets, Invesco Water Resources ETF has $1.93 billion. FIW has an expense ratio of 0.53% and PHO charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
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.