Markets

Momentum ETF (PDP) Hits New 52-Week High

For investors seeking momentum, Invesco DWA Momentum ETF PDP is probably on radar. The fund just hit a 52-week high, and is up 81% from its 52-week low price of $44.95 per share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

PDP in Focus

This fund provides investors with exposure to the companies that demonstrate powerful relative strength characteristics. It has key holdings in information technology, healthcare, consumer discretionary and industrials. The fund charges 62 bps in fees per year .

Why the Move?

The momentum corner of the broad market has been an area to watch lately given the surge in the stocks. After a dismal September, Wall Street regained momentum with back-to-back weekly gains driven by the prospects for another round of fiscal stimulus from Congress. Growing expectations of a Democratic victory in next month’s presidential election is also driving the stocks higher. Further, the hype surrounding Apple’s AAPL new iPhone launch event and Amazon’s AMZN annual Prime Day shopping event is strengthening the rally. The slew of news makes the momentum investing attractive. This is because the strategy seeks to capitalize on the continuance of an existing market trend. It looks to fetch profits from buying hot stocks that have shown an uptrend over the past few weeks or months.

More Gains Ahead?

It seems that PDP might remain strong given a higher weighted alpha of 39.9 and a mediocre risk as depicted by a 20-day volatility of 19.9%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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