The Invesco Dynamic Pharmaceuticals ETF (
PJP Quick Quote PJP - Free Report) was launched on 06/23/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Pharma 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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Healthcare - Pharma is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
The fund is sponsored by Invesco. It has amassed assets over $302.38 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Pharma segment of the equity market. PJP seeks to match the performance of the Dynamic Pharmaceutical Intellidex Index before fees and expenses.
The Dynamic Pharmaceutical Intellidex Index is comprised of stocks of U.S. pharmaceutical companies. It 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.
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 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.01%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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, Pfizer Inc (
PFE Quick Quote PFE - Free Report) accounts for about 6.84% of total assets, followed by Merck & Co Inc ( MRK Quick Quote MRK - Free Report) and Abbvie Inc ( ABBV Quick Quote ABBV - Free Report) .
The top 10 holdings account for about 60.62% of total assets under management.
Performance and Risk
The ETF has lost about -6.11% so far this year and is down about -6.15% in the last one year (as of 03/20/2023). In that past 52-week period, it has traded between $69.08 and $83.54.
The ETF has a beta of 0.66 and standard deviation of 19.59% for the trailing three-year period, making it a high risk choice in the space. With about 24 holdings, it has more concentrated exposure than peers.
Invesco Dynamic Pharmaceuticals ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. PJP, then, is not a suitable option for investors seeking exposure to the Health Care ETFs segment of the market. Instead, there are better ETFs in the space to consider.
IShares U.S. Pharmaceuticals ETF (
IHE Quick Quote IHE - Free Report) tracks Dow Jones U.S. Select Pharmaceuticals Index and the VanEck Pharmaceutical ETF ( PPH Quick Quote PPH - Free Report) tracks MVIS US Listed Pharmaceutical 25 Index. IShares U.S. Pharmaceuticals ETF has $369.95 million in assets, VanEck Pharmaceutical ETF has $380.26 million. IHE has an expense ratio of 0.39% and PPH charges 0.36%. Bottom Line
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