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Should You Invest in the Invesco Dorsey Wright Technology Momentum ETF (PTF)?

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If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Invesco Dorsey Wright Technology Momentum ETF (PTF - Free Report) , a passively managed exchange traded fund launched on 10/12/2006.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - 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 $449.63 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. PTF seeks to match the performance of the DWA Technology Technical Leaders Index before fees and expenses.

The Dorsey Wright??Technology 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

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.

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

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.

This ETF has heaviest allocation in the Information Technology sector--about 83.30% of the portfolio, followed by Telecom.

Looking at individual holdings, Ast Spacemobile Inc (ASTS - Free Report) accounts for about 10.51% of total assets, followed by Nvidia Corp (NVDA - Free Report) and Fair Isaac Corp (FICO - Free Report) .

The top 10 holdings account for about 44.19% of total assets under management.

Performance and Risk

So far this year, PTF has gained about 25.58%, and it's up approximately 43.60% in the last one year (as of 10/01/2024). During this past 52-week period, the fund has traded between $40.47 and $65.67.

The ETF has a beta of 1.28 and standard deviation of 33.46% for the trailing three-year period, making it a high risk choice in the space. With about 36 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Dorsey Wright Technology Momentum ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PTF is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $69.69 billion in assets, Vanguard Information Technology ETF has $76.64 billion. XLK has an expense ratio of 0.09% and VGT charges 0.10%.

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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