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Should You Invest in the Invesco Dorsey Wright Industrials Momentum ETF (PRN)?

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Looking for broad exposure to the Industrials - Broad segment of the equity market? You should consider the Invesco Dorsey Wright Industrials Momentum ETF (PRN - Free Report) , a passively managed exchange traded fund launched on 10/12/2006.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $235.47 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. PRN seeks to match the performance of the DWA Industrials Technical Leaders Index before fees and expenses.

The Dorsey Wright??Industrials 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.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.26%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector--about 95% of the portfolio.

Looking at individual holdings, Heico Corp (HEI - Free Report) accounts for about 4.28% of total assets, followed by Cintas Corp (CTAS - Free Report) and Vertiv Holdings Co (VRT - Free Report) .

The top 10 holdings account for about 36.30% of total assets under management.

Performance and Risk

So far this year, PRN has added about 20.62%, and was up about 32.82% in the last one year (as of 07/24/2024). During this past 52-week period, the fund has traded between $94.46 and $144.84.

The ETF has a beta of 1.10 and standard deviation of 22.36% for the trailing three-year period, making it a medium risk choice in the space. With about 42 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Dorsey Wright Industrials 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, PRN is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.36 billion in assets, Industrial Select Sector SPDR ETF has $19.90 billion. VIS has an expense ratio of 0.10% and XLI charges 0.09%.

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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