The Invesco Dynamic Software ETF has Underperformed this Year
The Invesco Dynamic Software ETF has performed poorly since the start of the year despite the tech sector performing excellently.
PSJ Down by 3% YTD
The Invesco Dynamic Software ETF (PSJ) has been around since 2005 and is a smart beta exchange-traded fund. The fund provides investors with broad exposure to the Technology ETFs category of the US stock market.
PSJ is a fund managed by Invesco, and it has nearly $450 million in assets under management, making it one of the average-sized ETFs in the technology sector. Before fees and expenses, PSJ intends to match the performance of the Dynamic Software Intellidex Index
This index comprises stocks in the software sector and is designed to provide capital appreciation by evaluating companies based on various investment merit criteria such as stock valuation, fundamental growth, risk factors and investment timeliness.
Since the start of the year, PSJ has performed poorly. The ETF’s price is down by more than 3% over the past 11 months, and its price could sink lower over the coming weeks.
PSJ Could Sink Lower Soon
PSJ has annual operating expenses of 0.56%, which is on par with most of the funds in this space. However, the fund has underperformed since the start of the year. At press time, PSJ is trading at $148.41, up by 0.28% over the past 24 hours.
The ETF has its heaviest allocation in the information technology sector (roughly 52%), with telecom and healthcare rounding up the top three. PSJ invests mostly in leading software companies such as Hubspot Inc. (HUBS), Intuit Inc. (INTU) and Microsoft Corp (MSFT).
Despite investing in some of the leading software companies, PSJ has underperformed in recent months. The fund’s trading price could slip below the $140 level over the coming weeks if the current market trend is maintained.
PSJ has a beta of 0.97 and a standard deviation of 28.14% for the trailing three-year period. As such, it is a high-risk ETF in the software sector of the US equity market.