Is Invesco Semiconductors ETF (PSI) a Strong ETF Right Now?

The Invesco Semiconductors ETF (PSI) made its debut on 06/23/2005, and is a smart beta exchange traded fund that provides broad exposure to the Technology ETFs category of the market.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.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.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexBecause the fund has amassed over $732.52 million, this makes it one of the larger ETFs in the Technology ETFs. PSI is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the Dynamic Semiconductor Intellidex Index.The Dynamic Semiconductor Intellidex Index is comprised of stocks of semiconductor companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.Cost & Other ExpensesSince 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 0.57% for this ETF, which makes it on par with most peer products in the space.The fund has a 12-month trailing dividend yield of 0.19%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.For PSI, it has heaviest allocation in the Information Technology sector --about 100% of the portfolio.Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 5.51% of total assets, followed by Broadcom Inc (AVGO) and Micron Technology Inc (MU).Its top 10 holdings account for approximately 49.06% of PSI's total assets under management.Performance and RiskThe ETF has added about 15.59% so far this year and is up roughly 30.18% in the last one year (as of 11/26/2024). In the past 52-week period, it has traded between $42.90 and $66.72.PSI has a beta of 1.38 and standard deviation of 36.70% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.AlternativesInvesco Semiconductors ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.IShares Semiconductor ETF (SOXX) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $14.26 billion in assets, VanEck Semiconductor ETF has $23.73 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.Bottom LineTo 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.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco Semiconductors ETF (PSI): ETF Research Reports Micron Technology, Inc. (MU): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report VanEck Semiconductor ETF (SMH): ETF Research Reports iShares Semiconductor ETF (SOXX): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks