Designed to provide broad exposure to the Technology - Internet segment of the equity market, the Invesco NASDAQ Internet ETF (PNQI) is a passively managed exchange traded fund launched on 06/12/2008.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $855.97 million, making it one of the larger ETFs attempting to match the performance of the Technology - Internet segment of the equity market. PNQI seeks to match the performance of the NASDAQ Internet Index before fees and expenses.
The Nasdaq CTA Internet Index is a modified market-capitalization weighted index designed to track the performance of the largest & most liquid U.S.-listed companies engaged in internet-related businesses & that are listed on one of the three major U.S. stock exchanges.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 32.10% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 8.35% of total assets, followed by Meta Platforms Inc (META) and Alphabet Inc (GOOG).
The top 10 holdings account for about 59.98% of total assets under management.
Performance and Risk
The ETF has added roughly 32.91% so far this year and it's up approximately 38.55% in the last one year (as of 12/04/2024). In that past 52-week period, it has traded between $34.07 and $47.94.
The ETF has a beta of 1.15 and standard deviation of 29.38% for the trailing three-year period, making it a high risk choice in the space. With about 79 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco NASDAQ Internet ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PNQI is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
ARK Next Generation Internet ETF (ARKW) tracks N/A and the First Trust Dow Jones Internet ETF (FDN) tracks Dow Jones Internet Composite Index. ARK Next Generation Internet ETF has $1.82 billion in assets, First Trust Dow Jones Internet ETF has $6.77 billion. ARKW has an expense ratio of 0.87% and FDN charges 0.51%.
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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports
Alphabet Inc. (GOOG) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
ARK Next Generation Internet ETF (ARKW): ETF Research Reports
First Trust Dow Jones Internet ETF (FDN): ETF Research Reports
Meta Platforms, Inc. (META) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
