Is Invesco Water Resources ETF (PHO) a Strong ETF Right Now?

Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco Water Resources ETF (PHO) is a smart beta exchange traded fund launched on 12/06/2005.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.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.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.By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexBecause the fund has amassed over $2.25 billion, this makes it one of the larger ETFs in the Industrials ETFs. PHO is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ OMX US Water Index.The NASDAQ OMX US Water Index tracks the performance of US exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries.Cost & Other ExpensesWhen considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins 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.The fund has a 12-month trailing dividend yield of 0.46%.Sector Exposure and Top HoldingsWhile 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.This ETF has heaviest allocation in the Industrials sector - about 63.80% of the portfolio. Information Technology and Utilities round out the top three.When you look at individual holdings, Roper Technologies Inc (ROP) accounts for about 7.94% of the fund's total assets, followed by Ecolab Inc (ECL) and Ferguson Enterprises Inc (FERG).PHO's top 10 holdings account for about 57.34% of its total assets under management.Performance and RiskThe ETF has gained about 14.52% and was up about 26.19% so far this year and in the past one year (as of 11/21/2024), respectively. PHO has traded between $55.68 and $72.10 during this last 52-week period.The fund has a beta of 0.98 and standard deviation of 19.38% for the trailing three-year period, which makes PHO a medium risk choice in this particular space. With about 40 holdings, it has more concentrated exposure than peers.AlternativesInvesco Water Resources ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.Invesco S&P Global Water Index ETF (CGW) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $966.75 million in assets, First Trust Water ETF has $1.86 billion. CGW has an expense ratio of 0.56% and FIW charges 0.53%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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 Water Resources ETF (PHO): ETF Research Reports Ecolab Inc. (ECL): Free Stock Analysis Report Roper Technologies, Inc. (ROP): Free Stock Analysis Report Invesco S&P Global Water Index ETF (CGW): ETF Research Reports First Trust Water ETF (FIW): ETF Research Reports Ferguson plc (FERG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks