4 min readBy Beqa Bumbeishvili ETF Insider
How does the PEZ ETF work?
The PEZ ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The Invesco PEZ issuer, in adherence to its guidelines, entrusts Dorsey, Wright & Associates, LLC, as the Index Provider, to compile and maintain the Underlying Index. This index is meticulously crafted, comprising a minimum of 30 securities from the consumer discretionary sector, selected based on robust relative strength or momentum attributes. Dorsey Wright employs a proprietary methodology to assess the momentum of each security, emphasizing recent performance trends against benchmarks. The Index Provider selects securities with the highest momentum scores, ensuring a dynamic composition reflective of market conditions. With a portfolio spanning from retail to automotive sectors, the Underlying Index adapts to the cyclic nature of consumer discretionary businesses. Employing a full replication strategy, the Fund mirrors the Underlying Index, investing in securities proportionally. While the Fund may concentrate investments in specific industries based on index allocation, it does so only in alignment with the Underlying Index's composition. As of June 30, 2023, the Underlying Index consisted of 39 constituents, highlighting its diverse market capitalization spectrum. This strategy ensures adaptability and resilience in the Fund's portfolio holdings over time.
The PEZ Dividend, managed by Invesco, adheres to a disciplined approach in seeking dividend-yielding securities within the consumer discretionary sector. Leveraging Dorsey, Wright & Associates, LLC as the Index Provider, the fund focuses on compiling an Underlying Index consisting of securities displaying robust momentum characteristics. This strategy aims to identify companies within consumer discretionary industries that not only exhibit strong relative strength but also possess the potential for consistent dividend payouts. With a portfolio selected from approximately 2,000 of the largest constituents by market capitalization within the Nasdaq US Benchmark™ Index, the PEZ Dividend emphasizes securities with reliable dividend histories. By employing a full replication methodology, the fund mirrors the composition of the Underlying Index, ensuring that investors gain exposure to dividend-paying securities in proportion to their weightings. This disciplined investment approach offers investors seeking dividend income within the consumer discretionary sector a diversified and potentially rewarding investment opportunity.
The PEZ Tracking ETF, managed by Invesco, is meticulously designed to closely track the performance of its Underlying Index, curated and maintained by Dorsey, Wright & Associates, LLC. This index consists of at least 30 securities within the consumer discretionary sector, selected based on their robust momentum characteristics. Utilizing a proprietary methodology, the Index Provider evaluates the relative strength and momentum of each security, ensuring a dynamic and adaptive composition reflective of market conditions. By employing a full replication strategy, the PEZ Tracking ETF invests in all securities comprising the Underlying Index, proportional to their weightings, thus closely mirroring the index's performance. This disciplined approach offers investors the opportunity to gain exposure to the consumer discretionary sector's potential growth and momentum while minimizing tracking error.
The PEZ Correlation ETF, overseen by Invesco, is structured to monitor and manage correlation risks effectively within the consumer discretionary sector. Under the guidance of Dorsey, Wright & Associates, LLC, the Index Provider constructs an Underlying Index comprising a diverse selection of securities demonstrating strong momentum characteristics. Through a meticulous evaluation process, securities are selected based on their relative strength, ensuring a dynamic and responsive portfolio reflective of market dynamics. By employing a full replication methodology, the fund invests in all securities within the Underlying Index, proportionate to their weightings, aiming to closely align with the index's performance. This strategic approach enables investors to potentially mitigate correlation risks within the consumer discretionary sector while seeking opportunities for growth and momentum.
The PEZ Sector ETF, managed by Invesco, focuses on providing investors exposure to the consumer discretionary sector with a strategic approach to sector investing. Under the stewardship of Dorsey, Wright & Associates, LLC, the Index Provider meticulously constructs and maintains the Underlying Index, which comprises securities demonstrating robust momentum characteristics within the consumer discretionary sector. Through a proprietary methodology, securities are selected based on their relative strength, ensuring a dynamic and responsive portfolio reflective of market trends. Employing a full replication strategy, the fund invests in all securities within the Underlying Index in proportion to their weightings, aiming to closely track the sector's performance. This disciplined approach offers investors a targeted investment vehicle to capitalize on opportunities within the consumer discretionary sector while diversifying
The PEZ Exposure ETF, managed by Invesco, offers investors a tailored approach to gain exposure to the consumer discretionary sector. Under the guidance of Dorsey, Wright & Associates, LLC, the Index Provider meticulously curates the Underlying Index, composed of securities exhibiting robust momentum characteristics within this sector. Leveraging a proprietary methodology, securities are selected based on their relative strength, ensuring a dynamic and responsive portfolio reflective of market dynamics. With a full replication strategy in place, the fund invests in all securities within the Underlying Index, proportionate to their weightings, providing investors with comprehensive exposure to the consumer discretionary sector's potential growth opportunities. This strategic approach enables investors to access the sector's momentum while diversifying risk across a broad spectrum of securities.
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