Invesco US’ Post

John Lewis, CMT, Senior Portfolio Manager, was recently asked the following:   Can you review the process used to construct and rebalance the Invesco Dorsey Wright Momentum ETF ($PDP)?    "PDP is an ETF that holds 100 high momentum stocks from a universe of large and mid cap stocks. It is rebalanced and reconstituted quarterly so it can be very responsive to changing market conditions. One thing that is different in PDP that we don’t see in a lot of other ETF’s is the way we weight the stocks in the index. Most ETF’s follow a market cap weighting method which gives more weight to larger companies. Market cap weighting works just fine for broad, passive strategy, but isn’t the most efficient way to allocate an active strategy. We weight the securities in PDP based on momentum. The best momentum stocks in our scoring system get the highest weight. We know the bulk of momentum returns come from the highest ranks so it makes sense to overweight based on that rather than just company size."   To learn more: https://lnkd.in/drCdVHMr Invesco US

How to invest in the S&P 500 from Europe? 🇪🇺📈 The S&P 500 has delivered stellar returns over the last 30 years, outperforming many major indices. But how can European investors tap into this growth? 📝In our detailed guide, we cover: - How to pick the best S&P 500 ETF; - What should you look for in any ETF; - A comparison of leading ETF brokers; - Common mistakes to avoid, and more! Get all the details here 👇 🔗 https://lnkd.in/dp_tJSbQ #Investment #SP500 #ETF #Finance #InvestingInTheWeb

FTSE Russell is delighted to announce the licensing of the Russell 2000 RIC Capped Index to Global X (Global X ETFs) for the launch of a new ETF. Russell 2000 Chartbook: https://ow.ly/S3Mt50SimNL FTSE Russell – Your Index Matters: https://ow.ly/kEw250SimNK #TheRightETFStartsWithTheRightIndex

When investing in ETFs, one crucial metric to understand is Tracking Error. But what exactly does this term mean? Tracking Error is a measure of how closely an ETF's performance mirrors the performance of its benchmark index. Ideally, an ETF should perfectly replicate the returns of its index, but there are often slight deviations. These deviations are what we call Tracking Error. Tracking Error is typically expressed as a percentage. A lower Tracking Error indicates the ETF is closely following its benchmark, which is generally desirable for index investors. When evaluating ETFs, comparing their Tracking Errors can provide insight into their efficiency and effectiveness in mirroring their respective indices. #ETFs #Investing #InvestmentStrategy #DigitalAssets #TechnicalTuesdays #JacobiAssetManagement

Investors aren’t ready to give up growth stocks.

While expense ratios are important, tracking error, which measures how closely an ETF follows its benchmark, can have a bigger impact on your returns, especially for fixed income ETFs. Learn more in this case study: https://lnkd.in/guPfaG_z

As talk of a potential rotation into small cap stocks has picked up recently, investors may want to consider the Invesco Dorsey Wright SmallCap Momentum ETF ($DWAS). The inception of this ETF was 7/19/2012. This strategy holds approximately 200 small cap stocks that meet our momentum criteria and is rebalanced on a quarterly basis. To learn more:  https://lnkd.in/eTMjqEqB

When we look at the price ratio of the Invesco S&P 500 Equal Weight ETF relative to the SPDR S&P 500 ETF we see that equal weighting has clearly underperformed market-cap weighting in this cycle. However, we are now potentially at an inflection point. https://buff.ly/3KcEB34

Equity Income Strategies: A valuation / Value leaning market implies a shift from Dividend Growth to Dividend Yield strategies. This has already begun with the iShares DVY outperforming the Vanguard VIG, a Div growth led ETF.

There are more than 3,000 ETFs (exchange-traded funds) currently available to the US investor. Numbers increasing. Here are 5 steps for choosing the right ETF: 1) The index that the ETF tracks should represent the asset class that you want to invest in (e.g. the S&P 500, the price of gold, or US treasury bonds) 2) The ETF must "replicate" the index, meaning it buys the actual components of the index, not placeholders like futures or other derivatives (you can find this information out in each ETF's fact sheet or prospectus) 3) The ETF’s expense ratio should be as low as possible, ideally in the single or very low double-digits (so you get to keep as much of your money as possible) 4) Assess how much money the ETF manages (called assets under management): generally, the more the better, with a minimum of $10M (otherwise the risk of it closing is too high) 5) Find out how many of the ETF's shares are traded daily on average: the more the better, so you can buy and sell it easily and cheaply There are more factors to consider if you want to get all nerdy. But if you master these 5, you will get it right 99% of the time. #ETF #longterminvesting — This post neither constitutes individualized investment advice nor a recommendation. It only serves as general information aimed to educate and share the opinion of its author. Investments in stocks, ETFs, and other securities can lose value. My firm Pine Ridge Wealth LLC is registered as an investment adviser with the State of North Carolina and provides fee-only investment advisory services to individuals and families, small businesses, and non-profits. We may only conduct business with residents of states in which we are properly registered. For a full disclaimer and disclosure of conflicts of interest, see our website www.pineridgewealth.com