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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 long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
POWA is managed by Invesco, and this fund has amassed over $237.39 million, which makes 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.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.35%.
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.
For POWA, it has heaviest allocation in the Industrials sector --about 24.10% of the portfolio --while Healthcare and Information Technology round out the top three.
Looking at individual holdings, Servicenow Inc (NOW - Free Report) accounts for about 2.39% of total assets, followed by Walmart Inc (WMT - Free Report) and Cummins Inc (CMI - Free Report) .
Its top 10 holdings account for approximately 22.73% of POWA's total assets under management.
Performance and Risk
Year-to-date, the Invesco Bloomberg Pricing Power ETF has added about 18.12% so far, and is up about 19.44% over the last 12 months (as of 12/17/2024). POWA has traded between $70.81 and $87.68 in this past 52-week period.
The ETF has a beta of 0.87 and standard deviation of 11.01% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Bloomberg Pricing Power ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
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 $160.34 billion in assets, Invesco QQQ has $334.77 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 long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
POWA is managed by Invesco, and this fund has amassed over $237.39 million, which makes 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.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.35%.
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.
For POWA, it has heaviest allocation in the Industrials sector --about 24.10% of the portfolio --while Healthcare and Information Technology round out the top three.
Looking at individual holdings, Servicenow Inc (NOW - Free Report) accounts for about 2.39% of total assets, followed by Walmart Inc (WMT - Free Report) and Cummins Inc (CMI - Free Report) .
Its top 10 holdings account for approximately 22.73% of POWA's total assets under management.
Performance and Risk
Year-to-date, the Invesco Bloomberg Pricing Power ETF has added about 18.12% so far, and is up about 19.44% over the last 12 months (as of 12/17/2024). POWA has traded between $70.81 and $87.68 in this past 52-week period.
The ETF has a beta of 0.87 and standard deviation of 11.01% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Bloomberg Pricing Power ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
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 $160.34 billion in assets, Invesco QQQ has $334.77 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.