Why This Invesco ETF Might Be the Most Underrated Index Fund Available Today

Tech exchange-traded funds (ETFs) person been immoderate of the best-performing investments implicit the past fewer decades. They springiness investors entree to a wide cross-section of the champion exertion stocks successful 1 wrapper. This includes the biggest names, similar Nvidia and Apple, the hottest tech stocks, similar Sandisk and Micron Technology, and emerging stars you whitethorn person ne'er adjacent heard of -- yet.

There are immoderate highly fashionable tech ETFs that person delivered immense returns for investors implicit the years, similar the Invesco QQQ (NASDAQ: QQQ), Vanguard Information Technology ETF (NYSEMKT: VGT), State Street Technology Select SPDR ETF (NYSEMKT: XLK), and iShares U.S Technology ETF (NYSEMKT: IYW).

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But determination is 1 overlooked and underrated tech ETF that has outperformed them each implicit the years -- the Invesco Dorsey Wright Technology Momentum ETF (NASDAQ: PTF). If youʻre looking for a tech ETF, adhd this 1 to your list.

The champion Invesco ETF -- and it's not QQQ

The Invesco Dorsey Wright Technology Momentum ETF is based connected the Dorsey Wright Technology Technical Leaders Index, which tracks astatine slightest 30 exertion stocks from the Nasdaq Composite that grounds beardown comparative spot oregon momentum.

Stocks with the champion comparative spot are considered the strongest performers based connected a proprietary methodology that determines a momentum score. The portfolio includes astatine slightest 30 of the highest-momentum stocks. The stocks tin travel from crossed the exertion assemblage and see small-, mid-, and large-cap names.

Currently, the ETF contains 40 stocks with Sandisk, Nvidia, and Apple arsenic the 3 largest holdings successful the cap-weighted portfolio. Small-cap holdings see CACI International, InterDigital, and Vistance Networks.

The Invesco Dorsey Wright Technology Momentum ETF has been astir since 2006. Since then, it has posted an mean annualized instrumentality of 21%. Over the past one-, five-, and 10-year periods, it has had mean annualized returns of 88%, 23%, and 26%, respectively. That beats its larger, aforementioned exertion ETF competitors for each clip period. And this year, arsenic of May 21, this ETF has returned a whopping 58%.

The ETF has an disbursal ratio that is higher than mean astatine 0.6%, but its accordant outperformance has much than accounted for it.

Investors should enactment this is simply a highly concentrated, sector-specific, aggressive-growth ETF, truthful it is prone to important swings. But it does formed a wide nett for tech stocks with momentum, truthful adjacent successful down markets, similar 2022, it has outperformed the Nasdaq.