Invesco DWA Momentum ETF (PDP)PDP

Summary of US ETF Invesco DWA Momentum ETF (PDP)

Profile: Invesco DWA Momentum ETF (PDP) is an actively managed exchange-traded fund that seeks to track the Dorsey Wright Momentum Index. This index invests in US large and mid-cap stocks across various sectors, focusing on companies demonstrating strong relative price momentum. PDP uses a quantitative methodology to select and weigh its holdings, aiming to capture stocks experiencing upward price trends.

Objective: PDP's primary investment goal is to outperform the broad market by identifying and investing in stocks with strong momentum characteristics.

Issuer: Invesco Ltd. is the issuer of PDP.

Reputation and Reliability: Invesco is a globally recognized asset management firm with a long track record and a strong reputation for expertise and reliability.

Management: The ETF is managed by a team of experienced portfolio managers at Invesco who specialize in quantitative strategies and momentum investing.

Market Share: PDP has a market share of approximately 0.5% within the actively managed large-cap US equity ETF category.

Total Net Assets: As of November 3, 2023, PDP's total net assets were approximately USD 1.5 billion.

Moat: PDP's competitive advantages include its unique momentum-based investment strategy, experienced management team, and strong track record. The Dorsey Wright Momentum Index has outperformed the S&P 500 Index over extended periods.

Financial Performance: PDP has historically delivered competitive returns, outperforming the S&P 500 Index in most years since its inception in 2005.

Benchmark Comparison: PDP has consistently outperformed its benchmark, the Dorsey Wright Momentum Index, demonstrating the effectiveness of its active management approach.

Growth Trajectory: PDP has experienced steady growth in assets under management, reflecting increasing investor interest in momentum-based strategies.

Liquidity: PDP has an average daily trading volume of approximately 200,000 shares, indicating good liquidity.

Bid-Ask Spread: The bid-ask spread for PDP is typically tight, around 0.02%, indicating low transaction costs.

Market Dynamics: Factors affecting PDP's market environment include overall market sentiment, economic conditions, and sector performance. Momentum strategies generally perform well in rising markets and may underperform in declining markets.

Competitors: Key competitors of PDP include iShares Edge MSCI USA Momentum Factor ETF (MTUM) and SPDR S&P 500 Momentum ETF (MOM).

Expense Ratio: PDP's expense ratio is 0.60%, which is considered competitive within the actively managed large-cap US equity ETF category.

Investment Approach and Strategy: PDP employs a quantitative momentum strategy, focusing on stocks with strong relative price strength and positive earnings revisions. The ETF invests in a diversified portfolio of large and mid-cap US stocks across various sectors.

Composition: PDP's portfolio typically comprises around 75-100 stocks from various sectors, with a focus on technology, healthcare, and consumer discretionary. The top holdings may change frequently due to the dynamic nature of the momentum strategy.

Key Points:

• Actively managed ETF tracking the Dorsey Wright Momentum Index.
• Focuses on US large and mid-cap stocks with strong momentum.
• Outperformed the S&P 500 Index in most years since inception.
• Competitive expense ratio and good liquidity.

Risks:

• Higher volatility than the broader market due to its focus on momentum stocks.
• Potential underperformance in declining markets.
• Sector concentration risk, as the portfolio may be overweight specific sectors.

Who Should Consider Investing: PDP may be suitable for investors seeking:

• Exposure to US large and mid-cap stocks with strong momentum characteristics.
• Potential for outperformance compared to the broad market.
• Tolerance for higher volatility and sector concentration risk.

Fundamental Rating Based on AI: Based on an AI-based analysis of PDP's financials, market position, and future prospects, the ETF receives a 7 out of 10 rating. This rating reflects PDP's strong track record, experienced management team, and competitive expense ratio. However, investors should consider the potential risks associated with momentum strategies and sector concentration before investing.

Resources:

• Invesco DWA Momentum ETF website: https://us.invesco.com/products/etfs/pdp
• Dorsey Wright Momentum Index website: https://www.dorseywright.com/momentum/
• Morningstar: https://www.morningstar.com/etfs/arcx/pdp/quote

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.