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Is Invesco Building & Construction ETF (PKB) a Strong ETF Right Now?
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Making its debut on 10/26/2005, smart beta exchange traded fund Invesco Building & Construction ETF (PKB - Free Report) provides investors broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PKB has amassed assets over $426.15 million, making it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, PKB seeks to match the performance of the Dynamic Building & Construction Intellidex Index.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.62%, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.22%.
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.
For PKB, it has heaviest allocation in the Industrials sector --about 37.40% of the portfolio --while Consumer Discretionary and Materials round out the top three.
Taking into account individual holdings, Trane Technologies Plc (TT - Free Report) accounts for about 5.14% of the fund's total assets, followed by Carlisle Cos Inc (CSL - Free Report) and Pultegroup Inc (PHM - Free Report) .
Its top 10 holdings account for approximately 45.54% of PKB's total assets under management.
Performance and Risk
So far this year, PKB has gained about 33.18%, and was up about 59.23% in the last one year (as of 11/14/2024). During this past 52-week period, the fund has traded between $54.53 and $86.37.
The ETF has a beta of 1.35 and standard deviation of 26.29% for the trailing three-year period, making it a high risk choice in the space. With about 32 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 $2.15 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?
Making its debut on 10/26/2005, smart beta exchange traded fund Invesco Building & Construction ETF (PKB - Free Report) provides investors broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PKB has amassed assets over $426.15 million, making it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, PKB seeks to match the performance of the Dynamic Building & Construction Intellidex Index.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.62%, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.22%.
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.
For PKB, it has heaviest allocation in the Industrials sector --about 37.40% of the portfolio --while Consumer Discretionary and Materials round out the top three.
Taking into account individual holdings, Trane Technologies Plc (TT - Free Report) accounts for about 5.14% of the fund's total assets, followed by Carlisle Cos Inc (CSL - Free Report) and Pultegroup Inc (PHM - Free Report) .
Its top 10 holdings account for approximately 45.54% of PKB's total assets under management.
Performance and Risk
So far this year, PKB has gained about 33.18%, and was up about 59.23% in the last one year (as of 11/14/2024). During this past 52-week period, the fund has traded between $54.53 and $86.37.
The ETF has a beta of 1.35 and standard deviation of 26.29% for the trailing three-year period, making it a high risk choice in the space. With about 32 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 $2.15 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.