This Fund Cut $6 Million from One Momentum ETF — But It’s Not About Fear

Indiana-based LJI Wealth Management disclosed the sale of 52,386 shares of the Invesco DWA Momentum ETF (PDP), with an estimated transaction value of $5.9 million during the third quarter in an SEC filing on Wednesday.

What Happened

According to a filing with the Securities and Exchange Commission released on Wednesday, LJI Wealth Management reduced its holding in the Invesco Dorsey Wright Momentum ETF (NASDAQ:PDP) by 52,386 shares during the third quarter. The estimated value of the shares sold was $5.9 million based on the quarterly average price. The firm reported holding 21,170 shares of PDP after the transaction.

What Else to Know

This sale lowered PDP’s weight in the portfolio from 1.4% of AUM to 0.4% as of September 30.

Top holdings after the filing:

• NYSEMKT:ITOT: $166.4 million (29.1% of AUM)
• NASDAQ:SLQD: $58.6 million (10.2% of AUM)
• NASDAQ:ONEQ: $30 million (5.2% of AUM)
• NYSEMKT:VTI: $27.5 million (4.8% of AUM)
• NYSEMKT:IWM: $26.6 million (4.6% of AUM)

As of Wednesday market close, shares of PDP were priced at $123.06, up 16% over the past year and slightly underperforming the S&P 500's 18.5% gain in the same period.

ETF Overview

ETF Snapshot

• PDP's investment strategy focuses on tracking the underlying index, allocating at least 90% of assets to approximately 100 securities from the NASDAQ US Benchmark universe.
• The portfolio consists primarily of large-cap U.S. stocks, with holdings rebalanced periodically based on index methodology.
• Structured as an exchange-traded fund, PDP provides exposure through a passively managed, rules-based approach.

The Invesco DWA Momentum ETF (PDP) provides investors with targeted access to U.S. equities demonstrating sustained price momentum, leveraging a quantitative, index-driven strategy. The fund's disciplined methodology provides broad exposure to leading large-cap stocks.

Foolish Take

LJI Wealth Management’s third-quarter portfolio changes suggest a subtle shift toward discipline rather than defensiveness. The Indianapolis-based firm sold 52,386 shares of the Invesco DWA Momentum ETF (PDP)—an estimated $5.9 million reduction—and also trimmed its Vanguard Russell 2000 Growth ETF (VTWG) position, according to its SEC filing. The move reduced PDP’s portfolio weight from 1.4% to 0.4%, signaling profit-taking after a strong run in high-momentum stocks.

LJI’s own commentary this summer emphasized “thinking like an institution” and staying objective when fear or greed dominate headlines. That philosophy tracks with its recent portfolio activity—paring back risk in smaller and momentum-driven equities while remaining heavily invested in more diversified, core holdings like ITOT and VTI, which now anchor about 34% of assets under management.

For long-term investors, this positioning reflects a disciplined, data-driven approach consistent with LJI’s belief that markets “are undefeated over time.” The firm’s reduced exposure to momentum names suggests a focus on maintaining balance after a rally, rather than reacting to short-term sentiment.

Glossary

13F AUM: The total market value of assets reported in a firm's quarterly SEC Form 13F filing.

ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a diversified basket of assets.

Momentum: An investment strategy focusing on securities showing strong recent price performance relative to peers.

Rebalanced: Adjusting a portfolio's holdings to maintain target allocations or index methodology.

Alpha: A measure of an investment's performance relative to a benchmark, indicating excess return.

Dividend yield: Annual dividends paid by a security, expressed as a percentage of its current price.

Index-driven strategy: An investment approach that tracks a specific market index using predefined rules.

Large-cap: Companies with a large market capitalization, typically over $10 billion.

Rules-based approach: Investment decisions made using systematic, predefined criteria rather than manager discretion.

Underlying index: The specific benchmark an ETF aims to replicate or track in its portfolio.

Portfolio weight: The proportion of a specific holding relative to the total value of the investment portfolio.

Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.