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Is Invesco Building & Construction ETF (PKB) a Strong ETF Right Now?
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The Invesco Building & Construction ETF (PKB - Free Report) made its debut on 10/26/2005, and is a smart beta exchange traded fund that provides broad exposure to the Industrials 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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, PKB has amassed assets over $346.94 million, making it one of the average sized ETFs in the Industrials ETFs. PKB seeks to match the performance of the Dynamic Building & Construction Intellidex Index before fees and expenses.
The Dynamic Building & Construction Intellidex Index is comprised of stocks of U.S. building and construction companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
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.
Operating expenses on an annual basis are 0.62% for this ETF, which makes it one of the most expensive products in the space.
PKB's 12-month trailing dividend yield is 0.23%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For PKB, it has heaviest allocation in the Industrials sector --about 40.90% of the portfolio --while Consumer Discretionary and Materials round out the top three.
Taking into account individual holdings, Pultegroup Inc (PHM - Free Report) accounts for about 5.52% of the fund's total assets, followed by Home Depot Inc/the (HD - Free Report) and Vulcan Materials Co (VMC - Free Report) .
The top 10 holdings account for about 46.03% of total assets under management.
Performance and Risk
The ETF return is roughly 14.49% and it's up approximately 32.38% so far this year and in the past one year (as of 09/12/2024), respectively. PKB has traded between $46.69 and $76.38 during this last 52-week period.
PKB has a beta of 1.34 and standard deviation of 26.07% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Building & Construction ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR S&P Homebuilders ETF (XHB - Free Report) tracks S&P Homebuilders Select Industry Index. The fund has $2.17 billion in assets. XHB has an expense ratio of 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 Industrials 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 Building & Construction ETF (PKB) a Strong ETF Right Now?
The Invesco Building & Construction ETF (PKB - Free Report) made its debut on 10/26/2005, and is a smart beta exchange traded fund that provides broad exposure to the Industrials 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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, PKB has amassed assets over $346.94 million, making it one of the average sized ETFs in the Industrials ETFs. PKB seeks to match the performance of the Dynamic Building & Construction Intellidex Index before fees and expenses.
The Dynamic Building & Construction Intellidex Index is comprised of stocks of U.S. building and construction companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
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.
Operating expenses on an annual basis are 0.62% for this ETF, which makes it one of the most expensive products in the space.
PKB's 12-month trailing dividend yield is 0.23%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For PKB, it has heaviest allocation in the Industrials sector --about 40.90% of the portfolio --while Consumer Discretionary and Materials round out the top three.
Taking into account individual holdings, Pultegroup Inc (PHM - Free Report) accounts for about 5.52% of the fund's total assets, followed by Home Depot Inc/the (HD - Free Report) and Vulcan Materials Co (VMC - Free Report) .
The top 10 holdings account for about 46.03% of total assets under management.
Performance and Risk
The ETF return is roughly 14.49% and it's up approximately 32.38% so far this year and in the past one year (as of 09/12/2024), respectively. PKB has traded between $46.69 and $76.38 during this last 52-week period.
PKB has a beta of 1.34 and standard deviation of 26.07% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Building & Construction ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR S&P Homebuilders ETF (XHB - Free Report) tracks S&P Homebuilders Select Industry Index. The fund has $2.17 billion in assets. XHB has an expense ratio of 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 Industrials 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.