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Is Invesco Biotechnology & Genome ETF (PBE) a Strong ETF Right Now?
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The Invesco Biotechnology & Genome ETF (PBE - Free Report) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. PBE has been able to amass assets over $271.25 million, making it one of the average sized ETFs in the Health Care ETFs. 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
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 this ETF are 0.58%, making it on par with most peer products in the space.
PBE's 12-month trailing dividend yield is 0.05%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PBE, it has heaviest allocation in the Healthcare sector --about 99.80% of the portfolio.
Taking into account individual holdings, Illumina Inc (ILMN - Free Report) accounts for about 5.56% of the fund's total assets, followed by United Therapeutics Corp (UTHR - Free Report) and Amgen Inc (AMGN - Free Report) .
Its top 10 holdings account for approximately 44.41% of PBE's total assets under management.
Performance and Risk
The ETF return is roughly 9.33% and is up about 30.14% so far this year and in the past one year (as of 11/11/2024), respectively. PBE has traded between $54.02 and $71.97 during this last 52-week period.
The fund has a beta of 0.80 and standard deviation of 23.45% 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 an excellent option for investors seeking to outperform the Health Care ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $7.47 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?
The Invesco Biotechnology & Genome ETF (PBE - Free Report) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. PBE has been able to amass assets over $271.25 million, making it one of the average sized ETFs in the Health Care ETFs. 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
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 this ETF are 0.58%, making it on par with most peer products in the space.
PBE's 12-month trailing dividend yield is 0.05%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PBE, it has heaviest allocation in the Healthcare sector --about 99.80% of the portfolio.
Taking into account individual holdings, Illumina Inc (ILMN - Free Report) accounts for about 5.56% of the fund's total assets, followed by United Therapeutics Corp (UTHR - Free Report) and Amgen Inc (AMGN - Free Report) .
Its top 10 holdings account for approximately 44.41% of PBE's total assets under management.
Performance and Risk
The ETF return is roughly 9.33% and is up about 30.14% so far this year and in the past one year (as of 11/11/2024), respectively. PBE has traded between $54.02 and $71.97 during this last 52-week period.
The fund has a beta of 0.80 and standard deviation of 23.45% 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 an excellent option for investors seeking to outperform the Health Care ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $7.47 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.