Looking for broad exposure to the Technology – Software segment of the equity market? You should consider the Invesco Dynamic Software ETF (PSJ), a passively managed exchange traded fund launched on 06/23/2005.
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.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology – Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
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The fund is sponsored by Invesco. It has amassed assets over $345.96 M, making it one of the average sized ETFs attempting to match the performance of the Technology – Software segment of the equity market. PSJ seeks to match the performance of the Dynamic Software Intellidex Index before fees and expenses.
The index is comprised of stocks of software 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.
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When considering an ETF’s total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.58%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.07%.
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ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector–about 51.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 5.74% of total assets, followed by Activision Blizzard Inc (ATVI) and Liberty Broadband Corp (LBRDK).
The top 10 holdings account for about 48.58% of total assets under management.
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So far this year, PSJ has lost about -25.71%, and is down about -17.82% in the last one year (as of 03/17/2020). During this past 52-week period, the fund has traded between $74.11 and $106.92.
The ETF has a beta of 1.06 and standard deviation of 24.10% for the trailing three-year period, making it a high risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
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Invesco Dynamic Software 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, PSJ is an outstanding 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.
SPDR S&P Software & Services ETF (XSW) tracks S&P Software & Services Select Industry Index and the iShares Expanded Tech-Software Sector ETF (IGV) tracks S&P North American Technology-Software Index. SPDR S&P Software & Services ETF has $153 M in assets, iShares Expanded Tech-Software Sector ETF has $2.44 B. XSW has an expense ratio of 0.35% and IGV charges 0.46%.
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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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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Invesco Dynamic Software ETF (PSJ): ETF Research Reports
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report
Liberty Broadband Corporation (LBRDK) : Free Stock Analysis Report
SPDR S&P Software & Services ETF (XSW): ETF Research Reports
iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research” data-reactid=”42″>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Invesco Dynamic Software ETF (PSJ): ETF Research Reports
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report
Liberty Broadband Corporation (LBRDK) : Free Stock Analysis Report
SPDR S&P Software & Services ETF (XSW): ETF Research Reports
iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
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