Invesco DWA Financial Momentum ETF (PFI)PFI

ETF Invesco DWA Financial Momentum ETF (PFI): An Overview

Profile

Invesco DWA Financial Momentum ETF (PFI) is an actively managed ETF that seeks to capture the performance of US-listed equities within the financial sector exhibiting strong relative price momentum. PFI employs the Dorsey Wright Asset Management's relative momentum methodology to select its holdings.

The ETF primarily focuses on the financials sector, with approximately 95% of its assets invested in financial stocks. The remaining 5% may be invested in other sectors deemed relevant by the portfolio managers. PFI utilizes a quantitative approach, selecting stocks based on their relative strength compared to other financial stocks.

Objective

The primary investment goal of PFI is to outperform the broad financials market by investing in stocks exhibiting strong relative momentum.

Issuer

Invesco

• Reputation and Reliability: Invesco is a globally recognized asset manager with a strong reputation for providing a diverse range of investment products and services. As of June 30, 2023, Invesco had over $1.8 trillion in assets under management.
• Management: The portfolio managers responsible for PFI have extensive experience in quantitative analysis and portfolio management within the financial sector.

Market Share

PFI is a relatively small ETF within the financial sector, with a market share of approximately 0.2%.

Total Net Assets

As of October 26, 2023, PFI has approximately $135.64 million in total net assets.

Moat

PFI's competitive advantages include:

• Unique investment strategy: The ETF's focus on relative momentum within the financial sector differentiates it from other financial sector ETFs.
• Experienced management team: The portfolio managers have a proven track record of success in managing quantitative investment strategies.
• Low expense ratio: The ETF's expense ratio is 0.60%, which is relatively low compared to other actively managed financial sector ETFs.

Financial Performance

Historical Performance: PFI has a relatively short track record, having launched in 2015. Since inception, the ETF has delivered an annualized return of 10.43% (as of October 26, 2023).

Benchmark Comparison: PFI has outperformed its benchmark, the S&P 500 Financials Index, over various timeframes, including 1 year, 3 years, and 5 years.

Growth Trajectory

PFI's growth trajectory appears positive. The financial sector is expected to benefit from rising interest rates and economic growth. Additionally, the ETF's unique investment strategy may continue to attract investors seeking outperformance within the financials sector.

Liquidity

Average Trading Volume: PFI has an average trading volume of approximately 16,000 shares per day, indicating moderate liquidity.

Bid-Ask Spread: The bid-ask spread for PFI is typically around 0.05%, indicating a relatively low trading cost.

Market Dynamics

Several factors can affect PFI's market environment, including:

• Economic indicators: PFI's performance is closely tied to the overall health of the financial sector, which is influenced by economic factors such as interest rates, inflation, and economic growth.
• Sector growth prospects: The outlook for the financial sector plays a significant role in PFI's performance.
• Market conditions: Market volatility and investor sentiment can impact the performance of individual stocks and the ETF as a whole.

Competitors

PFI's key competitors include:

• SPDR S&P Bank ETF (KBE): Market share - 16%
• Financial Select Sector SPDR Fund (XLF): Market share - 14%
• iShares U.S. Financials ETF (IYF): Market share - 10%

Expense Ratio

PFI's expense ratio is 0.60%.

Investment Approach and Strategy

Strategy: PFI utilizes a quantitative approach to identify and select stocks based on their relative price momentum within the financial sector.

Composition: The ETF primarily holds stocks of companies within the financials sector, including banks, insurance companies, and asset managers.

Key Points

• Actively managed ETF focusing on US financial stocks with strong relative momentum.
• Outperformed the S&P 500 Financials Index in recent years.
• Low expense ratio compared to other actively managed financial sector ETFs.
• Moderate liquidity and low trading cost.

Risks

• Volatility: PFI's focus on momentum stocks can lead to increased volatility compared to broader market indices.
• Market Risk: The ETF's performance is closely tied to the financial sector, which is exposed to various market risks.
• Tracking Error: As an actively managed ETF, PFI may deviate from its benchmark index performance.

Who Should Consider Investing

PFI may be suitable for investors seeking:

• Exposure to the financial sector: Investors seeking to gain exposure to the financial sector and its potential for growth.
• Outperformance: Investors seeking to outperform the broad financial market through active management.
• Momentum investing: Investors comfortable with the volatility associated with momentum investing strategies.

Fundamental Rating Based on AI

8/10

PFI exhibits strong fundamentals, including a unique investment strategy, experienced management team, and attractive expense ratio. Additionally, the ETF has a positive growth trajectory and has outperformed its benchmark index in recent years. However, investors should be mindful of the associated volatility and market risks.

AI analysis indicates a promising outlook for PFI's future prospects, considering its strong financial health, market position, and potential for continued outperformance.

Resources and Disclaimers

• Invesco DWA Financial Momentum ETF (PFI) Website: https://us.invesco.com/products/etfs/profile/overview?audienceType=Investor&productId=ETF-16261
• Yahoo Finance: https://finance.yahoo.com/quote/PFI/
• 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.