Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the Invesco Large Cap Growth ETF (PWB) is a smart beta exchange traded fund launched on 03/03/2005.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, PWB has amassed assets over $908.85 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. PWB, before fees and expenses, seeks to match the performance of the Dynamic Large Cap Growth Intellidex Index.
The Dynamic Large Cap Growth Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.53%.
The fund has a 12-month trailing dividend yield of 0.08%.
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.
PWB's heaviest allocation is in the Information Technology sector, which is about 32.60% of the portfolio. Its Financials and Telecom round out the top three.
When you look at individual holdings, Meta Platforms Inc (META) accounts for about 3.93% of the fund's total assets, followed by Visa Inc (V) and T-Mobile Us Inc (TMUS).
The top 10 holdings account for about 36.31% of total assets under management.
Performance and Risk
The ETF has lost about -7.30% so far this year and is up roughly 7.18% in the last one year (as of 04/15/2025). In the past 52-week period, it has traded between $83.83 and $110.71.
The fund has a beta of 1.10 and standard deviation of 21.30% for the trailing three-year period, which makes PWB a medium risk choice in this particular space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Large Cap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $142.27 billion in assets, Invesco QQQ has $289.68 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
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 Large Cap Growth ETF (PWB): ETF Research Reports Visa Inc. (V): Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports T-Mobile US, Inc. (TMUS): Free Stock Analysis Report Vanguard Growth ETF (VUG): ETF Research Reports Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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