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Is Invesco Semiconductors ETF (PSI) a Strong ETF Right Now?
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The Invesco Semiconductors ETF (PSI - Free Report) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Invesco. It has amassed assets over $792.72 million, making it one of the larger ETFs in the Technology ETFs. PSI seeks to match the performance of the Dynamic Semiconductor Intellidex Index before fees and expenses.
The Dynamic Semiconductor Intellidex Index is comprised of stocks of semiconductor 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for PSI are 0.57%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.18%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
PSI's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.
Looking at individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 6.16% of total assets, followed by Nvidia Corp (NVDA - Free Report) and Analog Devices Inc (ADI - Free Report) .
The top 10 holdings account for about 47.22% of total assets under management.
Performance and Risk
So far this year, PSI has added about 10.96%, and is up roughly 30.56% in the last one year (as of 09/23/2024). During this past 52-week period, the fund has traded between $37.92 and $66.72.
The fund has a beta of 1.37 and standard deviation of 36.34% for the trailing three-year period, which makes PSI a high risk choice in this particular space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Semiconductors ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $14.66 billion in assets, VanEck Semiconductor ETF has $22.39 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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 Semiconductors ETF (PSI) a Strong ETF Right Now?
The Invesco Semiconductors ETF (PSI - Free Report) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Invesco. It has amassed assets over $792.72 million, making it one of the larger ETFs in the Technology ETFs. PSI seeks to match the performance of the Dynamic Semiconductor Intellidex Index before fees and expenses.
The Dynamic Semiconductor Intellidex Index is comprised of stocks of semiconductor 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for PSI are 0.57%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.18%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
PSI's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.
Looking at individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 6.16% of total assets, followed by Nvidia Corp (NVDA - Free Report) and Analog Devices Inc (ADI - Free Report) .
The top 10 holdings account for about 47.22% of total assets under management.
Performance and Risk
So far this year, PSI has added about 10.96%, and is up roughly 30.56% in the last one year (as of 09/23/2024). During this past 52-week period, the fund has traded between $37.92 and $66.72.
The fund has a beta of 1.37 and standard deviation of 36.34% for the trailing three-year period, which makes PSI a high risk choice in this particular space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Semiconductors ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $14.66 billion in assets, VanEck Semiconductor ETF has $22.39 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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.