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.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Healthcare - Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.
The fund is sponsored by Invesco. It has amassed assets over $296.94 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.
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 0.58%, making it on par with most peer products in the space.
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 Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Biogen Inc (
BIIB Quick Quote BIIB - Free Report) accounts for about 5.89% of total assets, followed by Illumina Inc ( ILMN Quick Quote ILMN - Free Report) and Catalent Inc ( CTLT Quick Quote CTLT - Free Report) .
The top 10 holdings account for about 47.16% of total assets under management.
Performance and Risk
The ETF has gained about 7.25% so far this year and was up about 33.59% in the last one year (as of 09/15/2021). In that past 52-week period, it has traded between $54.93 and $83.81.
The ETF has a beta of 1.03 and standard deviation of 29.31% 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 good 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 Biotechnology ETF ( IBB Quick Quote IBB - Free Report) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $7.01 billion in assets, iShares Biotechnology ETF has $11.04 billion. XBI has an expense ratio of 0.35% and IBB charges 0.45%. Bottom Line
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