Should You Invest in the Invesco NASDAQ Internet ETF (PNQI)?
Looking for broad exposure to the Technology - Internet segment of the equity market? You should consider the Invesco NASDAQ Internet ETF (PNQI), a passively managed exchange traded fund launched on 06/12/2008.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $577.21 million, making it one of the larger ETFs attempting to match the performance of the Technology - Internet segment of the equity 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 & most liquid U.S.-listed companies engaged in internet-related businesses & that are listed on one of the three major U.S. stock exchanges.
Costs
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.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
While 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.
This ETF has heaviest allocation in the Telecom sector--about 30.70% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 8.42% of total assets, followed by Meta Platforms Inc (META) and Alphabet Inc (GOOG).
The top 10 holdings account for about 60.67% of total assets under management.
Performance and Risk
The ETF return is roughly 42.02% and it's up approximately 28.45% so far this year and in the past one year (as of 09/19/2023), respectively. PNQI has traded between $21.14 and $33.70 during this last 52-week period.
The ETF has a beta of 1.16 and standard deviation of 31.02% for the trailing three-year period, making it a high risk choice in the space. With about 84 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco NASDAQ Internet 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, PNQI is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
ARK Next Generation Internet ETF (ARKW) tracks N/A and the First Trust Dow Jones Internet ETF (FDN) tracks Dow Jones Internet Composite Index. ARK Next Generation Internet ETF has $1.33 billion in assets, First Trust Dow Jones Internet ETF has $5.87 billion. ARKW has an expense ratio of 0.88% and FDN charges 0.52%.
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 NASDAQ Internet ETF (PNQI): ETF Research Reports
Alphabet Inc. (GOOG): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
ARK Next Generation Internet ETF (ARKW): ETF Research Reports
First Trust Dow Jones Internet ETF (FDN): ETF Research Reports
Meta Platforms, Inc. (META): Free Stock Analysis Report