Invesco DWA Consumer Cyclicals Momentum ETF (PEZ)

Invesco DWA Consumer Cyclicals Momentum ETF (PEZ)

Profile:

Invesco DWA Consumer Cyclicals Momentum ETF (PEZ) is an actively managed exchange-traded fund that tracks the Dorsey Wright Consumer Cyclicals Index. The ETF primarily invests in large- and mid-cap U.S. stocks within the consumer discretionary and consumer staples sectors. It employs a quantitative momentum strategy, selecting stocks based on their relative strength and price momentum.

Objective:

The primary objective of PEZ is to achieve capital appreciation by investing in a portfolio of consumer cyclical stocks that exhibit strong relative strength and positive price momentum.

Issuer:

Invesco

• Reputation and Reliability: Invesco is a global asset management firm with a strong reputation and a long history of managing exchange-traded funds. As of June 30, 2023, Invesco had over $1.4 trillion in assets under management.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative investing and the consumer sector.

Market Share:

PEZ has a market share of approximately 0.5% within the consumer discretionary sector ETF category.

Total Net Assets:

As of November 8, 2023, PEZ has $1.27 billion in total net assets.

Moat:

• Quantitative Momentum Strategy: PEZ's use of a quantitative momentum strategy allows it to capture opportunities in the market based on price trends and relative strength, potentially leading to outperformance.
• Experienced Management Team: The ETF's management team has a strong track record in managing similar investment strategies.

Financial Performance:

• Historical Performance: Since its inception in 2010, PEZ has generated an annualized return of 12.69%.
• Benchmark Comparison: PEZ has outperformed the Consumer Discretionary Select Sector SPDR Fund (XLY) over the past 3 and 5 years.

Growth Trajectory:

The consumer discretionary sector is expected to experience moderate growth in the coming years, driven by factors such as rising consumer confidence and disposable income. This could positively impact PEZ's future performance.

Liquidity:

• Average Trading Volume: PEZ has an average trading volume of approximately 150,000 shares per day.
• Bid-Ask Spread: The bid-ask spread for PEZ is typically around 0.05%.

Market Dynamics:

Factors affecting PEZ's market environment include:

• Economic Indicators: Consumer confidence, disposable income, and interest rates can significantly impact the performance of consumer discretionary stocks.
• Sector Growth Prospects: The outlook for the consumer discretionary sector is influenced by factors such as technological advancements, changing consumer preferences, and global economic conditions.
• Current Market Conditions: Overall market volatility and investor sentiment can affect the performance of all assets, including PEZ.

Competitors:

• SPDR S&P Retail ETF (XRT): Market share 4.5%
• VanEck Retail ETF (RTH): Market share 2.5%
• iShares U.S. Consumer Discretionary ETF (IYC): Market share 1.5%

Expense Ratio:

The expense ratio for PEZ is 0.60%.

Investment Approach and Strategy:

• Strategy: PEZ actively manages its portfolio to track the Dorsey Wright Consumer Cyclicals Index.
• Composition: The ETF primarily invests in large- and mid-cap U.S. stocks within the consumer discretionary and consumer staples sectors. The portfolio is weighted based on the stocks' relative strength and price momentum.

Key Points:

• Actively managed ETF tracking the Dorsey Wright Consumer Cyclicals Index.
• Invests in large- and mid-cap U.S. consumer discretionary and consumer staples stocks.
• Employs a quantitative momentum strategy.
• Outperformed the benchmark index over the past 3 and 5 years.
• Moderate growth potential.

Risks:

• Market Volatility: The ETF's value can fluctuate significantly due to market volatility.
• Sector Risk: PEZ is concentrated in the consumer discretionary and consumer staples sectors, making it vulnerable to sector-specific risks.
• Management Risk: The ETF's performance is dependent on the skill of its management team.

Who Should Consider Investing:

PEZ is suitable for investors seeking:

• Exposure to the consumer discretionary and consumer staples sectors.
• Potential for capital appreciation through a momentum-based investment strategy.
• A higher risk tolerance.

Fundamental Rating Based on AI:

7.5/10

PEZ exhibits strong fundamentals, including a solid track record, an experienced management team, and a unique investment strategy. However, the ETF's sector concentration and sensitivity to market volatility pose potential risks.

Resources and Disclaimers:

• Invesco DWA Consumer Cyclicals Momentum ETF website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=PEZ
• Morningstar: https://www.morningstar.com/etfs/arcx/pez/quote
• ETF.com: https://www.etf.com/etf-profile/equity/pez

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