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Is Invesco Biotechnology & Genome ETF (PBE) a Strong ETF Right Now?
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Launched on 06/23/2005, the Invesco Biotechnology & Genome ETF (PBE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $263.37 million, this makes it one of the average sized ETFs in the Health Care ETFs. PBE is managed by Invesco. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Biotechnology & Genome Intellidex Index.
The Dynamic Biotech & Genome Intellidex Index seeks to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.58%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.02%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
PBE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
Looking at individual holdings, Amgen Inc (AMGN - Free Report) accounts for about 5.68% of total assets, followed by Vertex Pharmaceuticals Inc (VRTX - Free Report) and Biogen Inc (BIIB - Free Report) .
PBE's top 10 holdings account for about 48.64% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco Biotechnology & Genome ETF has added roughly 1.15% so far, and is up about 4.91% over the last 12 months (as of 01/03/2024). PBE has traded between $52.52 and $67.92 in this past 52-week period.
The ETF has a beta of 0.84 and standard deviation of 25.18% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Biotechnology & Genome ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR S&P Biotech ETF (XBI - Free Report) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB - Free Report) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $7.18 billion in assets, iShares Biotechnology ETF has $7.55 billion. XBI has an expense ratio of 0.35% and IBB charges 0.45%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco Biotechnology & Genome ETF (PBE) a Strong ETF Right Now?
Launched on 06/23/2005, the Invesco Biotechnology & Genome ETF (PBE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $263.37 million, this makes it one of the average sized ETFs in the Health Care ETFs. PBE is managed by Invesco. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Biotechnology & Genome Intellidex Index.
The Dynamic Biotech & Genome Intellidex Index seeks to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.58%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.02%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
PBE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
Looking at individual holdings, Amgen Inc (AMGN - Free Report) accounts for about 5.68% of total assets, followed by Vertex Pharmaceuticals Inc (VRTX - Free Report) and Biogen Inc (BIIB - Free Report) .
PBE's top 10 holdings account for about 48.64% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco Biotechnology & Genome ETF has added roughly 1.15% so far, and is up about 4.91% over the last 12 months (as of 01/03/2024). PBE has traded between $52.52 and $67.92 in this past 52-week period.
The ETF has a beta of 0.84 and standard deviation of 25.18% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Biotechnology & Genome ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR S&P Biotech ETF (XBI - Free Report) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB - Free Report) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $7.18 billion in assets, iShares Biotechnology ETF has $7.55 billion. XBI has an expense ratio of 0.35% and IBB charges 0.45%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.