Should You Invest in the Invesco Dynamic Biotechnology & Genome ETF (PBE)?
Sector ETF report for PBE
The Invesco Dynamic Biotechnology & Genome ETF (PBE) was launched on 06/23/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Biotech segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 15, placing it in bottom 6%.
The fund is sponsored by Invesco. It has amassed assets over $287.78 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
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, Biogen Inc (BIIB) accounts for about 5.89% of total assets, followed by Illumina Inc (ILMN) and Catalent Inc (CTLT).
The top 10 holdings account for about 47.16% of total assets under management.
Performance and Risk
So far this year, PBE has added roughly 4.73%, and it's up approximately 18.31% in the last one year (as of 10/12/2021). During this past 52-week period, the fund has traded between $56.54 and $83.81.
The ETF has a beta of 1.04 and standard deviation of 29.26% 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) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $6.64 billion in assets, iShares Biotechnology ETF has $10.07 billion. XBI has an expense ratio of 0.35% and IBB charges 0.45%.
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.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%.
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Invesco Dynamic Biotechnology & Genome ETF (PBE): ETF Research Reports
Biogen Inc. (BIIB): Free Stock Analysis Report
Illumina, Inc. (ILMN): Free Stock Analysis Report
iShares Biotechnology ETF (IBB): ETF Research Reports
Catalent, Inc. (CTLT): Free Stock Analysis Report
SPDR S&P Biotech ETF (XBI): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research