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Is Invesco Dynamic Biotechnology & Genome ETF (PBE) a Strong ETF Right Now?
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Making its debut on 06/23/2005, smart beta exchange traded fund Invesco Dynamic Biotechnology & Genome ETF (PBE - Free Report) provides investors broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $257.72 million, which makes it one of the average sized ETFs in the Health Care ETFs. PBE seeks to match the performance of the Dynamic Biotechnology & Genome Intellidex Index before fees and expenses.
The Dynamic Biotech & Genome Intellidex Index seeks to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.57% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
PBE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
Taking into account individual holdings, Biomarin Pharmaceutical Inc (BMRN - Free Report) accounts for about 6.11% of the fund's total assets, followed by Incyte Corp (INCY - Free Report) and Gilead Sciences Inc (GILD - Free Report) .
PBE's top 10 holdings account for about 46.77% of its total assets under management.
Performance and Risk
The ETF return is roughly 0.95% so far this year and was up about 0.87% in the last one year (as of 04/07/2023). In the past 52-week period, it has traded between $52.10 and $68.03.
PBE has a beta of 0.87 and standard deviation of 27.71% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Biotechnology & Genome ETF is not a suitable option for investors seeking to outperform the Health Care ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
SPDR S&P Biotech ETF (XBI - Free Report) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB - Free Report) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $6.42 billion in assets, iShares Biotechnology ETF has $8.15 billion. XBI has an expense ratio of 0.35% and IBB charges 0.44%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs.
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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Is Invesco Dynamic Biotechnology & Genome ETF (PBE) a Strong ETF Right Now?
Making its debut on 06/23/2005, smart beta exchange traded fund Invesco Dynamic Biotechnology & Genome ETF (PBE - Free Report) provides investors broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $257.72 million, which makes it one of the average sized ETFs in the Health Care ETFs. PBE seeks to match the performance of the Dynamic Biotechnology & Genome Intellidex Index before fees and expenses.
The Dynamic Biotech & Genome Intellidex Index seeks to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.57% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
PBE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
Taking into account individual holdings, Biomarin Pharmaceutical Inc (BMRN - Free Report) accounts for about 6.11% of the fund's total assets, followed by Incyte Corp (INCY - Free Report) and Gilead Sciences Inc (GILD - Free Report) .
PBE's top 10 holdings account for about 46.77% of its total assets under management.
Performance and Risk
The ETF return is roughly 0.95% so far this year and was up about 0.87% in the last one year (as of 04/07/2023). In the past 52-week period, it has traded between $52.10 and $68.03.
PBE has a beta of 0.87 and standard deviation of 27.71% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Biotechnology & Genome ETF is not a suitable option for investors seeking to outperform the Health Care ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
SPDR S&P Biotech ETF (XBI - Free Report) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB - Free Report) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $6.42 billion in assets, iShares Biotechnology ETF has $8.15 billion. XBI has an expense ratio of 0.35% and IBB charges 0.44%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs.
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.