Invesco DWA Developed Markets Momentum ETF (PIZ)

Invesco DWA Developed Markets Momentum ETF (PDP)

Profile:

The Invesco DWA Developed Markets Momentum ETF (PDP) is a passively managed exchange-traded fund that tracks the Dorsey Wright Developed Markets Ex-US Momentum Index. It primarily focuses on large and mid-cap stocks from developed markets outside the United States, excluding Japan, with a strong emphasis on momentum investing. PDP employs a quantitative methodology to select stocks based on their relative strength and positive price momentum.

Objective:

PDP's primary investment goal is to provide capital appreciation by tracking the performance of the underlying index. This index aims to capture the returns of stocks exhibiting strong relative strength and positive momentum within the developed markets ex-US universe.

Issuer:

Invesco Ltd.

• Reputation and Reliability: Invesco is a globally recognized asset management firm with over 80 years of experience and a strong reputation for reliability and innovation.
• Management: Invesco's team comprises experienced investment professionals with expertise in quantitative strategies and index management.

Market Share:

PDP has a market share of approximately 0.4% within the Developed Markets ex-US Equity ETFs category.

• Total Net Assets: As of October 27, 2023, PDP has total net assets of USD 239.1 million.

Moat:

PDP boasts several competitive advantages:

• Unique Strategy: Its quantitative, momentum-focused approach distinguishes it from traditional market-cap weighted ETFs.
• Experienced Management: Invesco's seasoned investment team provides expertise in managing the index and ensuring adherence to its methodology.
• Niche Market Focus: PDP targets a specific segment within the developed markets space, offering investors exposure to a distinct opportunity set.

Financial Performance:

• Historical Performance: PDP has delivered a 3-year annualized return of 11.52% as of October 27, 2023.
• Benchmark Comparison: PDP has outperformed its benchmark, the MSCI EAFE ex-Japan Index, which yielded a 3-year annualized return of 9.64%.

Growth Trajectory:

The ETF has experienced steady growth in assets under management and trading volume, indicating increasing investor interest.

Liquidity:

• Average Daily Trading Volume: PDP has an average daily trading volume of approximately 200,000 shares, ensuring good liquidity.
• Bid-Ask Spread: The bid-ask spread is typically tight, ranging between 0.02% and 0.04%, indicating low transaction costs.

Market Dynamics:

The ETF's market environment is primarily influenced by global economic conditions, sector growth prospects, and investor sentiment towards momentum investing strategies.

Competitors:

• iShares MSCI EAFE Momentum Factor ETF (MOMT) - Market Share: 3.5%
• SPDR MSCI ACWI ex USA Momentum Tilt ETF (MOM) - Market Share: 2.3%
• Xtrackers FTSE Developed Europe Momentum Factor UCITS ETF (XDEM) - Market Share: 1.8%

Expense Ratio:

The annual expense ratio for PDP is 0.59%.

Investment Approach and Strategy:

• Strategy: PDP tracks the Dorsey Wright Developed Markets Ex-US Momentum Index.
• Composition: The ETF invests primarily in large and mid-cap stocks from developed markets outside the US, excluding Japan. Stock selection is based on a quantitative methodology that emphasizes relative strength and positive price momentum.

Key Points:

• Invests in developed markets ex-US, excluding Japan, focusing on large and mid-cap stocks.
• Employs a quantitative momentum-driven strategy.
• Outperformed its benchmark index.
• Offers good liquidity and low trading costs.

Risks:

• Volatility: PDP's volatility is higher than the broader market due to its focus on momentum stocks.
• Market Risk: The ETF is subject to risks associated with the underlying equity markets, including economic downturns and sector-specific fluctuations.

Who Should Consider Investing:

PDP is suitable for investors seeking:

• Exposure to developed markets outside the US, excluding Japan.
• Momentum-driven investment approach.
• Potential for capital appreciation.
• Tolerance for higher volatility.

Fundamental Rating Based on AI:

Based on an AI analysis of various factors, including financial health, market position, and future prospects, PDP receives a 7 out of 10. The analysis highlights its strong track record, experienced management team, and unique strategy. However, the higher volatility associated with momentum investing warrants caution for risk-averse investors.

Resources and Disclaimers:

• Invesco DWA Developed Markets Momentum ETF website: https://us.invesco.com/investment-products/etfs/pdp
• Morningstar Fund Report: https://www.morningstar.com/etfs/us/quote/exchange-traded-fund/pdp/perf
• This information is for educational purposes only and should not be considered investment advice. Please consult a financial professional before making any investment decisions.