Launched on 10/26/2005, the Invesco Dynamic Building & Construction ETF (
PKB Quick Quote PKB - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Engineering and Construction segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Engineering and Construction is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
The fund is sponsored by Invesco. It has amassed assets over $284.74 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Engineering and Construction segment of the equity market. PKB seeks to match the performance of the Dynamic Building & Construction Intellidex Index before fees and expenses.
The 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.59%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.24%.
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.
This ETF has heaviest allocation in the Industrials sector--about 37.60% of the portfolio. Consumer Discretionary and Materials round out the top three.
Looking at individual holdings, Johnson Controls International Plc (
JCI Quick Quote JCI - Free Report) accounts for about 5.67% of total assets, followed by Trane Technologies Plc ( TT Quick Quote TT - Free Report) and Lowe's Cos Inc ( LOW Quick Quote LOW - Free Report) .
The top 10 holdings account for about 47% of total assets under management.
Performance and Risk
The ETF return is roughly 24.05% and was up about 43.01% so far this year and in the past one year (as of 09/14/2021), respectively. PKB has traded between $34.38 and $54.37 during this last 52-week period.
The ETF has a beta of 1.37 and standard deviation of 34.79% for the trailing three-year period, making it a high risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Invesco Dynamic Building & Construction 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, PKB is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Homebuilders ETF (
XHB Quick Quote XHB - Free Report) tracks S&P Homebuilders Select Industry Index and the iShares U.S. Home Construction ETF ( ITB Quick Quote ITB - Free Report) tracks Dow Jones U.S. Select Home Construction Index. SPDR S&P Homebuilders ETF has $1.82 billion in assets, iShares U.S. Home Construction ETF has $2.30 billion. XHB has an expense ratio of 0.35% and ITB charges 0.41%. Bottom Line
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