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Is Invesco Dynamic Building & Construction ETF (PKB) a Strong ETF Right Now?
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Launched on 10/26/2005, the Invesco Dynamic Building & Construction ETF (PKB - Free Report) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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. PKB has been able to amass assets over $204.07 million, making it one of the average sized ETFs in the Industrials ETFs. This particular fund seeks to match the performance of the Dynamic Building & Construction Intellidex Index before fees and expenses.
The Dynamic Building & Construction Intellidex 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.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.57% for PKB, making it on par with most peer products in the space.
PKB's 12-month trailing dividend yield is 0.39%.
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.
For PKB, it has heaviest allocation in the Consumer Discretionary sector --about 64% of the portfolio --while Industrials and Materials round out the top three.
Taking into account individual holdings, Pultegroup Inc (PHM - Free Report) accounts for about 5.32% of the fund's total assets, followed by Nvr Inc (NVR - Free Report) and Lennar Corp (LEN - Free Report) .
PKB's top 10 holdings account for about 45.95% of its total assets under management.
Performance and Risk
The ETF has added about 22.88% and was up about 20.20% so far this year and in the past one year (as of 06/09/2023), respectively. PKB has traded between $35.54 and $50.11 during this last 52-week period.
The ETF has a beta of 1.26 and standard deviation of 26.87% for the trailing three-year period, making it a high risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Building & Construction ETF is not a suitable option for investors seeking to outperform the Industrials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
SPDR S&P Homebuilders ETF (XHB - Free Report) tracks S&P Homebuilders Select Industry Index and the iShares U.S. Home Construction ETF (ITB - Free Report) tracks Dow Jones U.S. Select Home Construction Index. SPDR S&P Homebuilders ETF has $1.17 billion in assets, iShares U.S. Home Construction ETF has $2.02 billion. XHB has an expense ratio of 0.35% and ITB charges 0.39%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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 Building & Construction ETF (PKB) a Strong ETF Right Now?
Launched on 10/26/2005, the Invesco Dynamic Building & Construction ETF (PKB - Free Report) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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. PKB has been able to amass assets over $204.07 million, making it one of the average sized ETFs in the Industrials ETFs. This particular fund seeks to match the performance of the Dynamic Building & Construction Intellidex Index before fees and expenses.
The Dynamic Building & Construction Intellidex 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.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.57% for PKB, making it on par with most peer products in the space.
PKB's 12-month trailing dividend yield is 0.39%.
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.
For PKB, it has heaviest allocation in the Consumer Discretionary sector --about 64% of the portfolio --while Industrials and Materials round out the top three.
Taking into account individual holdings, Pultegroup Inc (PHM - Free Report) accounts for about 5.32% of the fund's total assets, followed by Nvr Inc (NVR - Free Report) and Lennar Corp (LEN - Free Report) .
PKB's top 10 holdings account for about 45.95% of its total assets under management.
Performance and Risk
The ETF has added about 22.88% and was up about 20.20% so far this year and in the past one year (as of 06/09/2023), respectively. PKB has traded between $35.54 and $50.11 during this last 52-week period.
The ETF has a beta of 1.26 and standard deviation of 26.87% for the trailing three-year period, making it a high risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Building & Construction ETF is not a suitable option for investors seeking to outperform the Industrials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
SPDR S&P Homebuilders ETF (XHB - Free Report) tracks S&P Homebuilders Select Industry Index and the iShares U.S. Home Construction ETF (ITB - Free Report) tracks Dow Jones U.S. Select Home Construction Index. SPDR S&P Homebuilders ETF has $1.17 billion in assets, iShares U.S. Home Construction ETF has $2.02 billion. XHB has an expense ratio of 0.35% and ITB charges 0.39%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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.