Invesco Dorsey Wright Momentum ETF (PDP) Covered Calls

Invesco DWA Momentum ETF (PDP) is an exchange-traded fund that tracks the Dorsey Wright Technical Leaders Index. The fund provides exposure to U.S.-listed large- and mid-cap companies selected based on relative strength momentum characteristics. PDP is designed for investors seeking to capitalize on upward price trends within the equity market. The portfolio is rebalanced quarterly to maintain its momentum-based strategy, identifying companies exhibiting powerful performance trends.

You can sell covered calls on Invesco Dorsey Wright Momentum ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for PDP (prices last updated Fri 4:16 PM ET):

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The Invesco DWA Momentum ETF (PDP) is a factor-based fund that targets the momentum investment style. Unlike market-capitalization-weighted funds, PDP uses a proprietary methodology to select stocks that demonstrate strong relative strength. This means the fund prioritizes companies that have historically outperformed their peers in recent trading periods, under the assumption that these positive price trends may continue.

Core Business and Objectives

The primary objective of PDP is to track the Dorsey Wright Technical Leaders Index. The selection process focuses on price performance rather than fundamental metrics like earnings or book value. This rules-based approach results in a concentrated portfolio of approximately 100 stocks. Because the strategy is purely technical, the fund’s sector weightings can shift significantly over time, allowing it to move capital into whichever industries are currently showing the most significant upward momentum.

By rotating quarterly, the fund attempts to avoid "trendless" or declining segments of the market. This makes PDP a tactical choice for investors who believe that price strength is a reliable indicator of future performance and who prefer a systematic, rather than discretionary, approach to momentum investing.

Competitive Landscape

The momentum category contains several notable funds. A primary competitor with significant assets is the iShares MSCI USA Momentum Factor ETF (MTUM), which uses a different methodology based on risk-adjusted momentum. Another relevant peer is the Invesco S&P 500 Momentum ETF (SPMO), which specifically focuses on the momentum factor within the S&P 500 index.

PDP distinguishes itself through its specific reliance on the Dorsey Wright technical methodology, which often leads to different sector exposures compared to competitors using more traditional momentum models. It is a well-established fund for investors specifically looking to leverage relative strength as their core investment signal.

Strategic Outlook and Innovation

The fund’s performance is highly sensitive to market cycles and the persistence of price trends. During periods of strong, sustained bull markets, momentum strategies have historically shown the potential to outperform broad market indices. However, the strategy can experience increased volatility or underperformance during sudden market reversals or extended sideways, "choppy" market conditions.

The long-term outlook for PDP is tied to the effectiveness of the momentum factor as a source of market outperformance. As the fund continues its quarterly rebalancing process, it remains a consistent vehicle for accessing high-relative-strength U.S. equities, providing a transparent, rules-based approach to trend-following for long-term investors.

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