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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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PBE has amassed assets over $263.21 million, making it one of the average sized ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the Dynamic Biotechnology & Genome Intellidex Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for PBE are 0.58%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.05%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 99.90% of the portfolio.
When you look at individual holdings, Gilead Sciences Inc (GILD - Free Report) accounts for about 5.58% of the fund's total assets, followed by Illumina Inc (ILMN - Free Report) and Regeneron Pharmaceuticals Inc (REGN - Free Report) .
Its top 10 holdings account for approximately 48.18% of PBE's total assets under management.
Performance and Risk
The ETF has gained about 5.55% and is up about 15.99% so far this year and in the past one year (as of 09/11/2024), respectively. PBE has traded between $52.52 and $71.87 during this last 52-week period.
The fund has a beta of 0.80 and standard deviation of 23.57% for the trailing three-year period, which makes PBE a high risk choice in this particular space. With about 32 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.
IShares Biotechnology ETF (IBB - Free Report) tracks Nasdaq Biotechnology Index and the SPDR S&P Biotech ETF (XBI - Free Report) tracks S&P Biotechnology Select Industry Index. IShares Biotechnology ETF has $7.68 billion in assets, SPDR S&P Biotech ETF has $7.70 billion. IBB has an expense ratio of 0.45% and XBI charges 0.35%.
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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PBE has amassed assets over $263.21 million, making it one of the average sized ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the Dynamic Biotechnology & Genome Intellidex Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for PBE are 0.58%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.05%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 99.90% of the portfolio.
When you look at individual holdings, Gilead Sciences Inc (GILD - Free Report) accounts for about 5.58% of the fund's total assets, followed by Illumina Inc (ILMN - Free Report) and Regeneron Pharmaceuticals Inc (REGN - Free Report) .
Its top 10 holdings account for approximately 48.18% of PBE's total assets under management.
Performance and Risk
The ETF has gained about 5.55% and is up about 15.99% so far this year and in the past one year (as of 09/11/2024), respectively. PBE has traded between $52.52 and $71.87 during this last 52-week period.
The fund has a beta of 0.80 and standard deviation of 23.57% for the trailing three-year period, which makes PBE a high risk choice in this particular space. With about 32 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.
IShares Biotechnology ETF (IBB - Free Report) tracks Nasdaq Biotechnology Index and the SPDR S&P Biotech ETF (XBI - Free Report) tracks S&P Biotechnology Select Industry Index. IShares Biotechnology ETF has $7.68 billion in assets, SPDR S&P Biotech ETF has $7.70 billion. IBB has an expense ratio of 0.45% and XBI charges 0.35%.
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.