Why is MTUM better than PDP?

MTUM may be considered better than PDP for some investors due to its specific focus, offering diversification.

PDP's performance relative to MTUM will vary over time, depending on market conditions.

Should I invest in MTUM or PDP?

The choice between MTUM and PDP should align with your investment goals, risk tolerance, and desired exposure.

Are MTUM and PDP good investments?

Both MTUM and PDP can be suitable investments depending on individual investment strategies, goals, and risk profiles.

What is the correlation between MTUM and PDP?

The correlation between MTUM and PDP can vary over time, reflecting differences in performance.

4 min read

By Ron Koren, ETF Insider

MTUM VS PDP

Exchange-Traded Funds (ETFs) have reshaped the landscape of investment, providing individuals with convenient access to diversified portfolios across a wide range of sectors and asset classes. In this article, we will embark on an in-depth exploration of two prominent ETFs: MTUM (iShares MSCI USA Momentum Factor ETF) and PDP (Invesco DWA Momentum ETF). Through a meticulous comparison, we will delve into the nuances of ETF tickers, full names, issuers, sectors, top holdings, capitalization, strategy, tracking, and exposure.

MTUM Vs PDP: Overview

MTUM and PDP stand as two ETFs that diverge in their approach to harnessing market momentum. MTUM focuses on tracking the performance of U.S. large and mid-cap stocks that exhibit momentum characteristics, whereas PDP employs a methodology developed by Dorsey Wright & Associates to select stocks based on relative strength. This variance in investment strategy warrants an in-depth examination to grasp the distinct attributes and potential returns associated with each ETF.

MTUM Vs PDP: Sectors and Top Holdings

MTUM, designed to capture the momentum factor, holds stocks that have exhibited strong recent performance. As of the latest available data, its top holdings include technology giants like Apple, Microsoft, and Amazon. PDP, on the other hand, employs a dynamic approach to its sector allocations, investing in sectors that are currently displaying momentum. This diversity in sector exposure adds an additional layer of complexity that investors should consider when evaluating these ETFs.

MTUM overlap MTUM VS PDP

MTUM Vs PDP: Capitalization and Strategy

MTUM's asset under management (AUM) has grown substantially over the years, demonstrating its appeal to investors seeking momentum-driven returns. The strategy centers around selecting stocks that exhibit strong and persistent price performance. PDP's strategy, rooted in relative strength, aims to identify stocks with strong price momentum relative to their peers. Both approaches come with their own set of risk and return considerations, making it imperative for investors to assess their risk tolerance and investment objectives.

MTUM Vs PDP: Tracking and Exposure

MTUM's underlying index consists of stocks with high price momentum, while PDP employs a methodology that selects stocks based on their relative strength. This difference in tracking methodology influences the stocks that make up each ETF's portfolio. MTUM's tracking index is composed of large and mid-cap stocks, whereas PDP includes a broader range of companies. Understanding the tracking methods and exposure of these ETFs is crucial for investors seeking to align their portfolios with their desired market exposure.

Conclusion

MTUM and PDP exemplify the power of ETFs in providing investors with strategic exposure to market momentum. Their distinct approaches cater to different investor preferences and risk appetites. To gain deeper insights into the nuances of these ETFs, such as their holdings, correlations, and overlaps, ETF Insider serves as an invaluable resource. This user-friendly app equips investors with a comprehensive toolkit to navigate the intricate world of financial instruments and make informed investment decisions.

Disclaimer: This article is intended for informational purposes only and does not provide investment advisory services.

Sources:
iShares MSCI USA Momentum Factor ETF (MTUM) Overview. iShares by BlackRock.
Invesco DWA Momentum ETF (PDP) Overview. Invesco.
"Understanding Momentum." BlackRock.

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FAQ

Why is MTUM better than PDP?
MTUM may be considered better than PDP for some investors due to its specific focus, offering diversification.
Does PDP beat MTUM?
PDP's performance relative to MTUM will vary over time, depending on market conditions.
Should I invest in MTUM or PDP?
The choice between MTUM and PDP should align with your investment goals, risk tolerance, and desired exposure.
Are MTUM and PDP good investments?
Both MTUM and PDP can be suitable investments depending on individual investment strategies, goals, and risk profiles.
What is the correlation between MTUM and PDP?
The correlation between MTUM and PDP can vary over time, reflecting differences in performance.