ETF Education Report: Invesco Dorsey Wright Financial Momentum ETF (PFI)

What this ETF is trying to do

The Invesco Dorsey Wright Financial Momentum ETF (PFI) is an exchange-traded fund that focuses on the financial sector. It looks for companies within that sector that show "momentum." This means it tracks a group of 50 different holdings.

Top Holdings

Because the list provided is partial, these are the largest companies held by the fund:

• Interactive Brokers Group Inc Class A (5.73%)

• Morgan Stanley (5.42%)

• JPMorgan Chase & Co (5.30%)

• The Goldman Sachs Group Inc (4.13%)

• Lemonade Inc Ordinary Shares (4.07%)

• American Healthcare REIT Inc Ordinary Shares (3.87%)

• StoneX Group Inc (3.78%)

• Citigroup Inc (3.38%)

• Bank of New York Mellon Corp (3.19%)

• Simon Property Group Inc (3.19%)

Please remember that holdings can change over time.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return." Price return only tracks how much the share price moves. Total return includes both the price change and any cash distributions (dividends) paid out.

• Year-to-Date (YTD): The price return is approximately 3.50%, while the total return is approximately 4.25%.

• One-Year: The price return was approximately 2.36%, while the total return was approximately 3.45%.

• Three-Year: The price return was approximately 40.52%, while the total return was approximately 47.87%.

The current price is $59.75. An estimated price from roughly one year ago was approximately $58.37.

Income and distribution explanation

This ETF pays out cash to investors, which is called a distribution. The distribution yield is approximately 1.02%. This means the cash paid out is about 1.02% of the ETF's price. These payments usually happen quarterly, and there were 4 payouts in the last 12 months.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases significantly. It is important for income investors to watch this, as they want their original investment (the principal) to stay stable.

For PFI, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The fund has shown positive total returns over the one-year and three-year periods.

• The erosion-risk measurements suggest the fund is currently stable.

Cons

• The distribution yield (1.02%) is relatively low compared to some other types of income-focused funds.

Beginner takeaway

When studying PFI, remember that the total return is higher than the price return because it includes the cash distributions. Always look at both numbers to see how the fund is performing overall. Additionally, while this fund pays regular distributions, a high yield does not always guarantee that the share price will stay the same.