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Should You Invest in the Invesco DWA Healthcare Momentum ETF (PTH)?

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Looking for broad exposure to the Healthcare - Broad segment of the equity market? You should consider the Invesco DWA Healthcare Momentum ETF (PTH - Free Report) , a passively managed exchange traded fund launched on 10/12/2006.

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.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $219.38 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. PTH seeks to match the performance of the DWA Healthcare Technical Leaders Index before fees and expenses.

The Dorsey Wright??Healthcare Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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, Unitedhealth Group Inc (UNH - Free Report) accounts for about 4.98% of total assets, followed by Tenet Healthcare Corp (THC - Free Report) and Idexx Laboratories Inc (IDXX - Free Report) .

The top 10 holdings account for about 40.67% of total assets under management.

Performance and Risk

The ETF has lost about -28.77% so far this year and is down about -34.10% in the last one year (as of 06/21/2022). In that past 52-week period, it has traded between $107.04 and $175.39.

The ETF has a beta of 0.98 and standard deviation of 32.26% for the trailing three-year period, making it a high risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco DWA Healthcare Momentum ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PTH is a great option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $14.44 billion in assets, Health Care Select Sector SPDR ETF has $35.84 billion. VHT has an expense ratio of 0.10% and XLV charges 0.10%.

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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