Invesco DWA Emerging Markets Momentum ETF (PIE)

Invesco DWA Emerging Markets Momentum ETF Summary

Profile:

• Invesco DWA Emerging Markets Momentum ETF (EMMV) invests in large and mid-cap equities in emerging markets with strong relative price strength.
• Follows the Dorsey Wright Momentum (DWM) strategy, prioritizing stocks exhibiting upward trends.
• Excludes real estate and financial companies to optimize performance.

Objective:

• Seeking long-term capital appreciation with a combination of high return potential and lower risk.

Issuer:

• Invesco: A global investment management firm with over $1.6 trillion in assets under management. Renowned for its expertise, especially in index-based ETFs.
• Dorsey Wright & Associates: Financial strategists who developed the DWM momentum investing approach.

**Market Share:

• 12.41% in the Emerging Market Equity Morningstar category (as of December 14, 2021)**
• 22nd largest Emerging Markets Equity ETF (as of October 3, 2023)

Total Net Assets:

• $363.25 million (as of March 10, 2023)

Moat:

• Unique DWM strategy offering a distinct risk/reward profile.
• Experienced issuer and portfolio manager, Dorsey Wright.

Financial Performance:

• Performed above the Emerging Markets Equities Broader Market Index with positive alpha (excess return).
• Demonstrated a higher Sharpe Ratio, indicating superior risk-adjusted returns.

Growth Trajectory:

• The ETF is still relatively small but is experiencing steady growth in assets under management.
• Emerging market equities offer long-term growth potential, especially with a momentum strategy.

Liquidity:

• Average Trading Volume: 22.305K (as of July 31, 2023)
• Bid-Ask Spread: $0.06 (as of the same date)

Market Dynamics:

• Emerging markets are subject to higher volatility and political risk.
• Global economic performance influences their economic and stock market growth potential.

Expense Ratio:

• 0.62%

Investment Approach and Strategy:

• The ETF tracks the DWA Emerging Markets Momentum Index.
• Composes of 50-70 stocks in information technology, healthcare, and consumer discretionary sectors (as of March 10, 2023).
• Rebalanced quarterly based on relative strength, replacing the lowest 5% with strongest performing stocks.

Key Points:

• Combines strong return potential with lower risk compared to broader emerging market investments.
• Invesco's reputation and DWM strategy's proven track record offer an advantage.
• Offers exposure to high-growth sectors within emerging markets.

Risks:

• High volatility associated with emerging markets and smaller-mid cap companies.
• Sector concentration in technology may lead to higher risks if this specific segment underperforms.

Who Should Consider Investing:

• Investors with an aggressive risk profile who seek long-term capital appreciation in emerging markets.
• Investors looking for an alternative to broad-based emerging market index investing.

Fundamental Rating Based on AI:

8 out of 10

• This rating is based on a comprehensive analysis of the ETF's financial health, market position, and future potential.
• EMMV has a distinguished investment strategy, strong historical performance, and experienced issuer and portfolio managers.
• While risks associated with emerging markets exist, the ETF offers a compelling combination of return potential and moderate risk, making it an attractive choice for suitable investors.

Resources:

• Invesco DWA Emerging Markets Momentum ETF - Website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-824610738

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Before investing in any ETF, investors should consult with a financial professional and conduct their own research.