Launched on 06/12/2008, the Invesco NASDAQ Internet ETF (PNQI – Free Report) is a passively managed exchange traded fund designed to provide broad exposure to the technology internet segment of the stock market.
While passively managed ETFs are an excellent vehicle for long-term investors, they are also popular with institutional and retail investors due to their low costs, transparency, flexibility and tax efficiency.
Investor-friendly sector ETFs offer many options for low-risk and diversified exposure to a broad group of companies in specific sectors. Technology – Internet is one of the 16 major Zacks sectors within the Zacks industry classification. It currently ranks 13th, in the bottom 19%.
Index Details
The fund is sponsored by Invesco. It has over $539.22 million in assets, making it one of the larger ETFs trying to match the performance of the technology internet segment of the stock market. PNQI seeks to match the performance of the NASDAQ Internet Index gross of fees and expenses.
The Nasdaq CTA Internet Index is a modified market capitalization-weighted index designed to reflect the performance of the largest and most liquid US-listed companies engaged in internet-related businesses and listed on any of the three major US exchanges.
Costs
Expense ratios are an important factor when looking at an ETF’s total return, and cheaper funds can significantly outperform their more expensive counterparts over the long term, all other factors being equal.
The annual operating costs for this ETF are 0.60%, which is in line with most comparable products in this area.
Industry presence and top stocks
ETFs offer diversified exposure, minimizing exposure to individual stocks. Nevertheless, it is important to deal with the holdings of a fund 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 telecom sector — around 36.40% of the portfolio. Information technology and consumer discretionary round out the top three.
Looking at individual holdings, Meta Platforms Inc (META – Free Report) accounts for approximately 8.91% of total assets, followed by Alphabet Inc (GOOG – Free Report) and Microsoft Corp (MSFT – Free Report).
The top 10 holdings account for about 61.22% of total assets under management.
performance and risk
Year-to-date, the Invesco NASDAQ Internet ETF’s return is about 27.16% so far and is up about 10.17% over the last 12 months (as of 16/05/2023). PNQI has traded between $105.68 and $145.23 for the past 52 weeks.
The ETF has a beta of 1.15 and a standard deviation of 31.82% for the last three-year period, making it a risky pick in this space. With around 86 holdings, company-specific risks are effectively spread.
alternatives
Invesco NASDAQ Internet ETF has a Zacks ETF Rank of 2 (Buy) based on the asset class’s expected return, expense ratio and momentum, among other factors. For this reason, PNQI is a great option for investors looking to gain exposure to the technology ETFs segment of the market. There are other additional ETFs in this space that investors might also want to consider.
The ARK Next Generation Internet ETF (ARKW – Free Report) tracks N/A and the First Trust Dow Jones Internet ETF (FDN – Free Report) tracks the Dow Jones Internet Composite Index. The ARK Next Generation Internet ETF has $1.18 billion in assets and the First Trust Dow Jones Internet ETF has $3.94 billion. ARKW has an expense ratio of 0.88% and FDN charges 0.51%.
bottom line
To learn more about this product and other ETFs, find products that fit your investment goals, and read articles on the latest developments in the ETF investing universe, please visit the Zacks ETF Center.
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