Making its debut on 03/03/2005, smart beta exchange traded fund Invesco Large Cap Growth ETF (PWB) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.05 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. PWB is managed by Invesco. This particular fund seeks to match the performance of the Dynamic Large Cap Growth Intellidex Index before fees and expenses.
The Dynamic Large Cap Growth Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.53% for PWB, making it on par with most peer products in the space.
PWB's 12-month trailing dividend yield is 0.07%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PWB, it has heaviest allocation in the Information Technology sector --about 33.80% of the portfolio --while Financials and Telecom round out the top three.
Taking into account individual holdings, Tesla Inc (TSLA) accounts for about 3.95% of the fund's total assets, followed by Alphabet Inc (GOOGL) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 35.86% of total assets under management.
Performance and Risk
The ETF has added about 7.41% so far this year and was up about 26.69% in the last one year (as of 02/13/2025). In the past 52-week period, it has traded between $83.83 and $110.06.
The ETF has a beta of 1.04 and standard deviation of 20.14% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Large Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $160.95 billion in assets, Invesco QQQ has $332.09 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Get it free >>Invesco Large Cap Growth ETF (PWB): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Vanguard Growth ETF (VUG): ETF Research Reports
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