PKW’s top holdings analysis
The PowerShares BuyBack Achievers ETF (PKW) seeks to replicate the market returns of the NASDAQ US BuyBack Achievers Index. The top holdings of PKW are Home Depot (HD), Lowe’s (LOW), Time Warner (TWX), 21st Century Fox (FOXA), and O’Reilly Automotive (ORLY).
The top five holdings represent 23.1% of the total portfolio of PKW, profoundly impacting the ETF’s market performance. The chart above compares the market performance of PKW with broader indexes such as the S&P 500 (SPY) and the NASDAQ.
PKW’s performance relative to market
The above graph shows the market price movement of $100 invested in PKW, SPY, and NASDAQ simultaneously on January 1, 2015. It can be observed that PKW has underperformed both the traditionally weighted SPY and the NASDAQ. While NASDAQ, which is the parent index of PKW, has performed well in the market with a year-to-date (or YTD) return of 8%, SPY has given a YTD return of 3.3%.
PKW has performed negatively in the market, with a YTD return of -0.7%. This poor performance can be attributed to the market performances of its top holdings.
FOXA, one of the top holdings of PKW, has underperformed in the market, with a negative trailing-12-month return of 14.6%. Similarly, TWX has also performed negatively in the market with a trailing-12-month return of -11.7%. Of the total 206 holdings of PKW, 102 have given negative performances in the market, whereas the rest have given positive returns.
Among the top stocks that have performed positively in the market are HD and LOW, with trailing-12-month returns of 32.5% and 19.8%, respectively.
In the next part of the series, we’ll analyze the flow of the funds with historical volumes of PKW in comparison with the iShares MSCI USA Quality Factor ETF (QUAL).