Should You Invest in the Invesco S&P SmallCap Health Care ETF (PSCH)?
Sector ETF report for PSCH
Looking for broad exposure to the Healthcare - Broad segment of the equity market? You should consider the Invesco S&P SmallCap Health Care ETF (PSCH), a passively managed exchange traded fund launched on 04/07/2010.
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 - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
The fund is sponsored by Invesco. It has amassed assets over $483.40 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.
The S&P SmallCap 600 Capped Health Care Index measures the overall performance of common stocks in the health care sector.
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.
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
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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 5.93% of total assets, followed by Neogenomics Inc (NEO) and Amn Healthcare Services Inc (AMN).
The top 10 holdings account for about 32.35% of total assets under management.
Performance and Risk
So far this year, PSCH return is roughly 5.87%, and was up about 7.42% in the last one year (as of 12/30/2021). During this past 52-week period, the fund has traded between $167.40 and $198.17.
The ETF has a beta of 1.07 and standard deviation of 27.68% for the trailing three-year period, making it a high risk choice in the space. With about 81 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 reasonable 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 $17.51 billion in assets, Health Care Select Sector SPDR ETF has $36.16 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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