Launched on 03/03/2005, the Invesco Dynamic Large Cap Value ETF (PWV) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $734.77 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.55%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.53%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 31.40% of the portfolio. Financials and Consumer Staples round out the top three.
Looking at individual holdings, United Parcel Service Inc (UPS) accounts for about 3.72% of total assets, followed by Abbvie Inc (ABBV) and Cisco Systems Inc (CSCO).
The top 10 holdings account for about 34.69% of total assets under management.
Performance and Risk
PWV seeks to match the performance of the Dynamic Large Cap Value Intellidex Index before fees and expenses. The Dynamic Large Cap Value Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.
The ETF has lost about -5.51% so far this year and is down about -6.35% in the last one year (as of 05/30/2023). In the past 52-week period, it has traded between $41.65 and $49.21.
The ETF has a beta of 0.88 and standard deviation of 16.60% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Invesco Dynamic Large Cap Value 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, PWV is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $48.59 billion in assets, Vanguard Value ETF has $98.85 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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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