Launched on 06/23/2005, the Invesco Dynamic Biotechnology & Genome ETF (
PBE Quick Quote PBE - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Biotech segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
The fund is sponsored by Invesco. It has amassed assets over $273.04 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Biotech segment of the equity market. PBE seeks to match the performance of the Dynamic Biotechnology & Genome Intellidex Index before fees and expenses.
This is comprised of stocks of 30 U.S. biotechnology and genome companies. These are companies that are principally engaged in the research, development, manufacture and marketing and distribution of various biotechnological products, services and processes and companies that benefit significantly from scientific and technological advances in biotechnology and genetic engineering and research.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.58%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.04%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Pacific Biosciences Of California Inc (
PACB Quick Quote PACB - Free Report) accounts for about 5.84% of total assets, followed by Qiagen Nv ( QGEN Quick Quote QGEN - Free Report) and Biogen Inc ( BIIB Quick Quote BIIB - Free Report) .
The top 10 holdings account for about 45.11% of total assets under management.
Performance and Risk
So far this year, PBE has added about 30.42%, and it's up approximately 28.92% in the last one year (as of 12/23/2020). During this past 52-week period, the fund has traded between $39.70 and $72.81.
The ETF has a beta of 1.18 and standard deviation of 28.72% 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.
Invesco Dynamic Biotechnology & Genome ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PBE is a sufficient option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Biotech ETF (
XBI Quick Quote XBI - Free Report) tracks S&P Biotechnology Select Industry Index and the iShares Nasdaq Biotechnology ETF ( IBB Quick Quote IBB - Free Report) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $8.84 billion in assets, iShares Nasdaq Biotechnology ETF has $10.52 billion. XBI has an expense ratio of 0.35% and IBB charges 0.46%. Bottom Line
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