Is Invesco Semiconductors ETF (PSI) a Strong ETF Right Now?

Designed to provide broad exposure to the Technology ETFs category of the market, the Invesco Semiconductors ETF (PSI) is a smart beta exchange traded fund launched on 06/23/2005.What Are Smart Beta ETFs?For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexThe fund is managed by Invesco, and has been able to amass over $644.34 million, which makes it one of the average sized ETFs in the Technology ETFs. This particular fund seeks to match the performance of the Dynamic Semiconductor Intellidex Index before fees and expenses.The Dynamic Semiconductor Intellidex Index is comprised of stocks of semiconductor companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.Cost & Other ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.PSI's 12-month trailing dividend yield is 0.17%.Sector Exposure and Top HoldingsWhile 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.Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.Taking into account individual holdings, Broadcom Inc (AVGO) accounts for about 5.81% of the fund's total assets, followed by Kla Corp (KLAC) and Applied Materials Inc (AMAT).Its top 10 holdings account for approximately 48.29% of PSI's total assets under management.Performance and RiskYear-to-date, the Invesco Semiconductors ETF has lost about -8.35% so far, and is down about -9.64% over the last 12 months (as of 06/04/2025). PSI has traded between $39.29 and $66.72 in this past 52-week period.The ETF has a beta of 1.48 and standard deviation of 37.56% for the trailing three-year period, making it a high risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.AlternativesInvesco Semiconductors ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.IShares Semiconductor ETF (SOXX) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $12.02 billion in assets, VanEck Semiconductor ETF has $22.97 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.Bottom LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco Semiconductors ETF (PSI): ETF Research Reports KLA Corporation (KLAC): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report VanEck Semiconductor ETF (SMH): ETF Research Reports iShares Semiconductor ETF (SOXX): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks