Should You Invest in the Invesco Dorsey Wright Industrials Momentum ETF (PRN)?

Designed to provide broad exposure to the Industrials - Broad segment of the equity market, the Invesco Dorsey Wright Industrials Momentum ETF (PRN) is a passively managed exchange traded fund launched on 10/12/2006.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $202.11 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. PRN seeks to match the performance of the DWA Industrials Technical Leaders Index before fees and expenses.

The Dorsey Wright??Industrials Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.

Costs

Since 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.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.36%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 92.80% of the portfolio.

Looking at individual holdings, Builders Firstsource Inc (BLDR) accounts for about 5.53% of total assets, followed by Ametek Inc (AME) and Saia Inc (SAIA).

The top 10 holdings account for about 42.29% of total assets under management.

Performance and Risk

The ETF return is roughly 13.75% and was up about 50.90% so far this year and in the past one year (as of 03/20/2024), respectively. PRN has traded between $89.48 and $135.34 during this last 52-week period.

The ETF has a beta of 1.09 and standard deviation of 22.80% for the trailing three-year period, making it a medium risk choice in the space. With about 44 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Dorsey Wright Industrials Momentum 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, PRN is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.09 billion in assets, Industrial Select Sector SPDR ETF has $17.55 billion. VIS has an expense ratio of 0.10% and XLI charges 0.09%.

Bottom Line

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 Dorsey Wright Industrials Momentum ETF (PRN): ETF Research Reports

AMETEK, Inc. (AME) : Free Stock Analysis Report

Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report

Vanguard Industrials ETF (VIS): ETF Research Reports

Industrial Select Sector SPDR ETF (XLI): ETF Research Reports

Saia, Inc. (SAIA) : Free Stock Analysis Report

To read this article on Zacks.com click here.

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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