Should Invesco Dynamic Large Cap Growth ETF (PWB) Be on Your Investing Radar?

If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Invesco Dynamic Large Cap Growth ETF (PWB), a passively managed exchange traded fund launched on 03/03/2005.

The fund is sponsored by Invesco. It has amassed assets over $564.19 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.55%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.31%.

Sector Exposure and Top Holdings

While 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 to the Information Technology sector--about 38.40% of the portfolio. Consumer Discretionary and Energy round out the top three.

Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 3.75% of total assets, followed by Nextera Energy Inc (NEE) and Microsoft Corp (MSFT).

The top 10 holdings account for about 31.47% of total assets under management.

Performance and Risk

PWB seeks to match the performance of the Dynamic Large Cap Growth Intellidex Index before fees and expenses. The Dynamic Large Cap Growth Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.

The ETF has gained about 2.11% so far this year and is down about -7.43% in the last one year (as of 03/14/2023). In the past 52-week period, it has traded between $56.26 and $74.18.

The ETF has a beta of 1 and standard deviation of 26.47% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco Dynamic Large Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PWB is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $74.19 billion in assets, Invesco QQQ has $154.23 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

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.

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Invesco Dynamic Large Cap Growth ETF (PWB): ETF Research Reports

NextEra Energy, Inc. (NEE) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

Broadcom Inc. (AVGO) : Free Stock Analysis Report

Invesco QQQ (QQQ): ETF Research Reports

Vanguard Growth ETF (VUG): ETF Research Reports

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Zacks Investment Research

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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