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Is Invesco Bloomberg Pricing Power ETF (POWA) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the Invesco Bloomberg Pricing Power ETF (POWA - Free Report) is a smart beta exchange traded fund launched on 12/15/2006.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Invesco, POWA has amassed assets over $201.98 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, POWA seeks to match the performance of the BLOOMBERG PRICING POWER INDEX .
The Bloomberg Pricing Power Index composes of U.S. large and mid-capitalization companies that are well-positioned to maintain stable profit margins in all market conditions while focusing on companies that have the smallest deviations among their annual gross profit margins over the last five years.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for POWA are 0.40%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.40%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
POWA's heaviest allocation is in the Industrials sector, which is about 29.40% of the portfolio. Its Healthcare and Information Technology round out the top three.
When you look at individual holdings, Iron Mountain Inc (IRM - Free Report) accounts for about 2.60% of the fund's total assets, followed by Lockheed Martin Corp (LMT - Free Report) and Best Buy Co Inc (BBY - Free Report) .
POWA's top 10 holdings account for about 22.4% of its total assets under management.
Performance and Risk
So far this year, POWA has gained about 13.94%, and was up about 24.16% in the last one year (as of 09/13/2024). During this past 52-week period, the fund has traded between $63.22 and $83.14.
POWA has a beta of 0.86 and standard deviation of 11.20% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Bloomberg Pricing Power ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $136.02 billion in assets, Invesco QQQ has $283.80 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
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 Bloomberg Pricing Power ETF (POWA) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the Invesco Bloomberg Pricing Power ETF (POWA - Free Report) is a smart beta exchange traded fund launched on 12/15/2006.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Invesco, POWA has amassed assets over $201.98 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, POWA seeks to match the performance of the BLOOMBERG PRICING POWER INDEX .
The Bloomberg Pricing Power Index composes of U.S. large and mid-capitalization companies that are well-positioned to maintain stable profit margins in all market conditions while focusing on companies that have the smallest deviations among their annual gross profit margins over the last five years.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for POWA are 0.40%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.40%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
POWA's heaviest allocation is in the Industrials sector, which is about 29.40% of the portfolio. Its Healthcare and Information Technology round out the top three.
When you look at individual holdings, Iron Mountain Inc (IRM - Free Report) accounts for about 2.60% of the fund's total assets, followed by Lockheed Martin Corp (LMT - Free Report) and Best Buy Co Inc (BBY - Free Report) .
POWA's top 10 holdings account for about 22.4% of its total assets under management.
Performance and Risk
So far this year, POWA has gained about 13.94%, and was up about 24.16% in the last one year (as of 09/13/2024). During this past 52-week period, the fund has traded between $63.22 and $83.14.
POWA has a beta of 0.86 and standard deviation of 11.20% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Bloomberg Pricing Power ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $136.02 billion in assets, Invesco QQQ has $283.80 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
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.