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Is Invesco Global Water ETF (PIO) a Strong ETF Right Now?
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The Invesco Global Water ETF (PIO - Free Report) was launched on 06/13/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $285.02 million, making it one of the average sized ETFs in the Industrials ETFs. PIO seeks to match the performance of the NASDAQ OMX Global Water Index before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.75% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Ecolab Inc (ECL - Free Report) accounts for about 8.51% of the fund's total assets, followed by Pentair Plc (PNR - Free Report) and Roper Technologies Inc (ROP - Free Report) .
The top 10 holdings account for about 56.07% of total assets under management.
Performance and Risk
The ETF has added about 9.63% and was up about 28.54% so far this year and in the past one year (as of 10/01/2024), respectively. PIO has traded between $31.37 and $43.54 during this last 52-week period.
The fund has a beta of 1.03 and standard deviation of 18.69% 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 $1.87 billion in assets, Invesco Water Resources ETF has $2.28 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?
The Invesco Global Water ETF (PIO - Free Report) was launched on 06/13/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $285.02 million, making it one of the average sized ETFs in the Industrials ETFs. PIO seeks to match the performance of the NASDAQ OMX Global Water Index before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.75% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Ecolab Inc (ECL - Free Report) accounts for about 8.51% of the fund's total assets, followed by Pentair Plc (PNR - Free Report) and Roper Technologies Inc (ROP - Free Report) .
The top 10 holdings account for about 56.07% of total assets under management.
Performance and Risk
The ETF has added about 9.63% and was up about 28.54% so far this year and in the past one year (as of 10/01/2024), respectively. PIO has traded between $31.37 and $43.54 during this last 52-week period.
The fund has a beta of 1.03 and standard deviation of 18.69% 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 $1.87 billion in assets, Invesco Water Resources ETF has $2.28 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.