Should You Invest in the Invesco S&P SmallCap Health Care ETF (PSCH)?
Sector ETF report for PSCH
Designed to provide broad exposure to the Healthcare - Broad segment of the equity market, the Invesco S&P SmallCap Health Care ETF (PSCH) is a passively managed exchange traded fund launched on 04/07/2010.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways 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 10, placing it in bottom 38%.
The fund is sponsored by Invesco. It has amassed assets over $484.73 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. PSCH seeks to match the performance of the S&P SmallCap 600 Capped Health Care Index before fees and expenses.
This Index is comprised of common stocks of U.S. healthcare companies.These are companies that are principally engaged in the business of providing healthcare-related products & services, including biotechnology, pharmaceuticals, medical technology and supplies & facilities and this Index is a subset of the S&P SmallCap 600 Index.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.29%, making it one of the least expensive products in the space.
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, Omnicell Inc (OMCL) accounts for about 5.22% of total assets, followed by Neogenomics Inc (NEO) and Amn Healthcare Services Inc (AMN).
The top 10 holdings account for about 34.08% of total assets under management.
Performance and Risk
The ETF has added roughly 5.38% so far this year and it's up approximately 29.90% in the last one year (as of 10/27/2021). In that past 52-week period, it has traded between $133.66 and $198.17.
The ETF has a beta of 1.12 and standard deviation of 28.16% for the trailing three-year period, making it a high risk choice in the space. With about 76 holdings, it effectively diversifies company-specific risk.
Invesco S&P SmallCap Health Care 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, PSCH is a sufficient 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.
Vanguard Health Care ETF (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $16.57 billion in assets, Health Care Select Sector SPDR ETF has $30.96 billion. VHT has an expense ratio of 0.10% and XLV charges 0.12%.
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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Invesco S&P SmallCap Health Care ETF (PSCH): ETF Research Reports
Omnicell, Inc. (OMCL): Free Stock Analysis Report
AMN Healthcare Services Inc (AMN): Free Stock Analysis Report
NeoGenomics, Inc. (NEO): Free Stock Analysis Report
Health Care Select Sector SPDR ETF (XLV): ETF Research Reports
Vanguard Health Care ETF (VHT): ETF Research Reports
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