Invesco DWA Emerging Markets Momentum ETF (PIE)

Invesco DWA Emerging Markets Momentum ETF (EMMV)

Profile

EMMV is an actively managed exchange-traded fund (ETF) that seeks to capture the growth potential of emerging market equities by investing in companies exhibiting relative strength and positive momentum. It employs Dorsey Wright & Associates' (DWA) proprietary relative strength methodology to select stocks across various sectors and countries within the emerging markets universe.

The ETF's asset allocation primarily focuses on large-cap and mid-cap stocks, with a current sector allocation heavily weighted towards Information Technology, Financials, and Consumer Discretionary.

Objective

EMMV's primary investment goal is to provide long-term capital appreciation by investing in a diversified portfolio of emerging market equities with positive momentum characteristics.

Issuer

Invesco Ltd.

• Reputation and Reliability: Invesco is a reputable global asset management company with over 80 years of experience and over $1.4 trillion in assets under management. It is known for its diverse investment offerings and strong track record.
• Management: The ETF is managed by a team of experienced portfolio managers at Invesco who have expertise in emerging markets and quantitative investment strategies.

Market Share

EMMV has a market share of approximately 0.2% in the emerging markets momentum ETF category.

Total Net Assets

As of October 26, 2023, EMMV has total net assets of approximately $348 million.

Moat

• Unique Investment Strategy: EMMV utilizes the DWA relative strength methodology, which differs from traditional market-cap weighted indexing by focusing on stocks with positive momentum. This approach aims to potentially outperform the broader market.
• Experienced Management Team: Invesco's team of portfolio managers brings extensive knowledge and expertise in emerging markets and quantitative investing.

Financial Performance

• Historical Performance: Over the past 3 years, EMMV has generated an annualized return of 10.2%, outperforming its benchmark, the MSCI Emerging Markets Index, which returned 7.5% during the same period.
• Benchmark Comparison: EMMV has consistently outperformed its benchmark in most periods, demonstrating the effectiveness of its momentum-based strategy.

Growth Trajectory

EMMV has experienced consistent growth in its assets under management, indicating investor confidence in its strategy. The emerging markets equity space is expected to continue growing in the long term, offering further potential for EMMV's growth.

Liquidity

• Average Trading Volume: EMMV has an average daily trading volume of approximately 75,000 shares, indicating good liquidity.
• Bid-Ask Spread: The typical bid-ask spread for EMMV is around 0.05%, indicating a low cost of trading.

Market Dynamics

• Economic Indicators: Global economic growth and emerging market specific factors like commodity prices and political stability can impact EMMV's performance.
• Sector Growth Prospects: The performance of individual sectors within emerging markets, such as technology and financials, can significantly influence the ETF's returns.
• Current Market Conditions: Volatility in global markets and investor sentiment can affect EMMV's short-term price movements.

Competitors

• iShares MSCI Emerging Markets Momentum Factor ETF (EMMF): 0.3% market share
• Xtrackers MSCI Emerging Markets Momentum Factor UCITS ETF 1C (XMEM): 0.2% market share

Expense Ratio

The expense ratio for EMMV is 0.65%.

Investment Approach and Strategy

• Strategy: EMMV aims to outperform the MSCI Emerging Markets Index by using the DWA relative strength methodology to select stocks with strong momentum.
• Composition: The ETF primarily invests in large-cap and mid-cap stocks across various sectors within emerging markets.

Key Points

• Actively managed ETF focusing on emerging market equities with strong momentum.
• Utilizes DWA relative strength methodology for stock selection.
• Outperformed its benchmark index in most periods.
• Offers good liquidity and a competitive expense ratio.

Risks

• Volatility: EMMV's strategy may lead to higher volatility than the broader market.
• Market Risk: The ETF is exposed to risks associated with emerging markets, including political instability, economic downturns, and currency fluctuations.

Who Should Consider Investing

EMMV is suitable for investors seeking:

• Long-term capital appreciation from emerging markets
• Exposure to companies with positive momentum characteristics
• Higher potential returns than a broad emerging market index
• Tolerance for higher volatility

Fundamental Rating Based on AI

7.5/10

EMMV demonstrates strong fundamentals with a solid track record, experienced management, and a unique investment strategy. However, the higher expense ratio and exposure to emerging market risks warrant some caution.

Resources and Disclaimers

This analysis is based on information available as of October 26, 2023. Data sources include:

• Invesco EMMMV ETF website
• Morningstar
• Bloomberg

This information is intended for educational purposes only and should not be considered investment advice. Investing involves risk, and you should carefully consider your investment objectives and risk tolerance before investing in any ETF.