Jhe Invesco NASDAQ Internet ETF (PNQI) was launched on 06/12/2008. It is a passively managed exchange-traded fund designed to provide broad exposure to the Technology – Internet segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility and tax efficiency; they are also excellent vehicles for long-term investors.
Additionally, sector ETFs offer convenient ways to gain low-risk, diversified exposure to a broad group of companies in particular sectors. Technology – Internet is one of 16 major Zacks sectors within the Zacks Industry Classification. He is currently ranked 8, which puts him in the top 50%.
The fund is sponsored by Invesco. It has amassed assets of over $545.38 million, making it one of the mid-sized ETFs attempting to match the performance of the Technology – Internet segment of the stock market. PNQI seeks to match the performance of the NASDAQ Internet Index before fees and expenses.
The Nasdaq CTA Internet Index is a modified market capitalization-weighted index designed to track the performance of the largest and most liquid United States-listed companies engaged in Internet-related businesses that are listed on the one of the three major US stock exchanges.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
The annual operating expense of this ETF is 0.60%, putting it on par with most peer products on the market.
Sector exposure and main holdings
ETFs provide diversified exposure and thus minimize single-stock risk, but it’s still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has the largest allocation to the information technology sector, approximately 33.50% of the portfolio. Telecommunications and consumer discretionary round out the top three.
Looking at individual holdings, Alphabet Inc (GOOG) accounts for approximately 10.68% of total assets, followed by Amazon.com Inc (AMZN) and Adobe Inc (ADBE).
The top 10 holdings represent approximately 60.54% of total assets under management.
Performance and risks
Year-to-date, the Invesco NASDAQ Internet ETF has lost ~-36.74% so far and is down ~-41.15% in the past 12 months (as of 05/06/2022 ). PNQI has traded between $137.03 and $261.31 over the past 52-week period.
The ETF has a beta of 1.15 and a standard deviation of 29.82% for the three-year period, making it a high-risk pick in the space. With approximately 81 holdings, it effectively diversifies company-specific risks.
Invesco NASDAQ Internet ETF carries a Zacks ETF Rank of 3 (Hold), which is based on the expected return of the asset class, expense ratio and momentum, among other factors. Thus, PNQI is a reasonable option for those looking to gain exposure to the technology ETF sector of the market. Investors could also consider other ETF options in the space.
ARK Next Generation Internet ETF (ARKW) tracks N/A and the First Trust Dow Jones Internet ETF (FDN) tracks the Dow Jones Internet Composite Index. ARK Next Generation Internet ETF has $1.75 billion in assets, First Trust Dow Jones Internet ETF has $4.93 billion. ARKW has an expense ratio of 0.83% and FDN charges 0.51%.
To learn more about this product and other ETFs, research products that match your investment goals, and read articles about the latest developments in the ETF investment universe, please visit Zacks ETF Center.
Want key ETF information delivered straight to your inbox?
Zacks’ free fund newsletter will update you weekly on top news and analysis, as well as the top performing ETFs.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.