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Is Invesco Dynamic Biotechnology & Genome ETF (PBE) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco Dynamic Biotechnology & Genome ETF (PBE - Free Report) debuted on 06/23/2005, and offers broad exposure to the Health Care 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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
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
The fund is sponsored by Invesco. It has amassed assets over $232.76 million, making it one of the average sized ETFs in the Health Care ETFs. PBE 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.59%.
It has a 12-month trailing dividend yield of 0%.
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.
PBE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
When you look at individual holdings, Catalent Inc (CTLT - Free Report) accounts for about 5.59% of the fund's total assets, followed by Repligen Corp (RGEN - Free Report) and Bio-Techne Corp (TECH - Free Report) .
Its top 10 holdings account for approximately 45.98% of PBE's total assets under management.
Performance and Risk
The ETF has lost about -12.76% and is down about -15.51% so far this year and in the past one year (as of 03/21/2022), respectively. PBE has traded between $56.78 and $79.80 during this last 52-week period.
The ETF has a beta of 1 and standard deviation of 28.66% 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 Dynamic 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 $7.14 billion in assets, iShares Biotechnology ETF has $8.55 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 Dynamic Biotechnology & Genome ETF (PBE) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco Dynamic Biotechnology & Genome ETF (PBE - Free Report) debuted on 06/23/2005, and offers broad exposure to the Health Care 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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
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
The fund is sponsored by Invesco. It has amassed assets over $232.76 million, making it one of the average sized ETFs in the Health Care ETFs. PBE 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.59%.
It has a 12-month trailing dividend yield of 0%.
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.
PBE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
When you look at individual holdings, Catalent Inc (CTLT - Free Report) accounts for about 5.59% of the fund's total assets, followed by Repligen Corp (RGEN - Free Report) and Bio-Techne Corp (TECH - Free Report) .
Its top 10 holdings account for approximately 45.98% of PBE's total assets under management.
Performance and Risk
The ETF has lost about -12.76% and is down about -15.51% so far this year and in the past one year (as of 03/21/2022), respectively. PBE has traded between $56.78 and $79.80 during this last 52-week period.
The ETF has a beta of 1 and standard deviation of 28.66% 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 Dynamic 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 $7.14 billion in assets, iShares Biotechnology ETF has $8.55 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.