Understanding the Invesco Dorsey Wright Consumer Cyclicals Momentum ETF (PEZ)

The Invesco Dorsey Wright Consumer Cyclicals Momentum ETF (ticker: PEZ) is an exchange-traded fund designed to follow a specific investment strategy. It focuses on "consumer cyclicals," which are companies that often see changes in demand based on how much money people have to spend. This ETF uses a "momentum" strategy, which generally looks for stocks that have been moving in a certain direction.

What the Numbers Show

When looking at PEZ, it is important to understand the difference between price return and total return. Price return only tracks how much the share price itself has changed. Total return includes both the change in share price and any cash distributions (dividends) paid out.

Here is what the recent data shows:

• Year-to-Date (YTD): The price return is approximately -8.44%, while the total return is approximately -8.08%.

• One-Year: The price return was approximately -3.55%, and the total return was approximately -3.17%.

• Three-Year: The fund has seen significant growth over a longer period, with a price return of approximately 50.06% and a total return of approximately 51.08%.

For context, the estimated price from roughly one year ago was $98.69, compared to the current price of $95.18.

Income and Distribution Explanation

Some investors look at ETFs for regular cash payments, known as distributions. PEZ has a distribution yield of approximately 0.40%. This means the cash paid out is quite small relative to the share price.

The distribution frequency for this ETF is described as "irregular" or "less frequent." Over the last 12 months, there were 3 payouts. Because these payments do not happen on a set schedule (like every month), they are considered irregular.

NAV Erosion Explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). It is important to note that a falling market price does not always mean the NAV is dropping.

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion. However, the fund has an erosion-risk score of 94, which is labeled as "Stable / sideways" with a "good" severity rating. There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in the PEZ portfolio. Please note that this is a partial list and holdings can change over time:

• Tapestry Inc (4.07%)

• Cardinal Health Inc (3.86%)

• Ralph Lauren Corp Class A (3.86%)

• Marriott International Inc Class A (3.65%)

• Hilton Worldwide Holdings Inc (3.58%)

• Williams-Sonoma Inc (3.49%)

• McKesson Corp (3.19%)

• Garrett Motion Inc (3.18%)

• Walmart Inc (3.17%)

• TJX Companies Inc (3.09%)

Pros and Cons

Pros:

• The fund has shown strong total returns over a three-year period.

• The erosion-risk score suggests the price movement has been relatively stable or sideways rather than rapidly declining.

Cons:

• The fund has experienced a share-price decline in both the year-to-date and one-year periods.

• The distribution yield is relatively low, and the payout frequency is irregular.

Beginner Takeaway

If you are researching PEZ, keep in mind that while it has shown strong growth over three years, its recent one-year and year-to-date performance shows a decline in share price. Additionally, if you are looking for regular income, the distributions from this ETF are infrequent and represent a small percentage of the share price.