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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare – Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $236.89 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.
Costs
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 0.57%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.05%.
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.
This ETF has heaviest allocation in the Healthcare sector–about 100% of the portfolio.
Looking at individual holdings, Sarepta Therapeutics Inc (SRPT) accounts for about 5.43% of total assets, followed by Regeneron Pharmaceuticals Inc (REGN) and Amgen Inc (AMGN).
The top 10 holdings account for about 47.28% of total assets under management.
Performance and Risk
So far this year, PBE has added about 8.81%, and is up about 14.23% in the last one year (as of 08/05/2020). During this past 52-week period, the fund has traded between $39.70 and $62.86.
The ETF has a beta of 1.28 and standard deviation of 27.42% 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 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 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.
SPDR SP Biotech ETF (XBI) tracks S&P Biotechnology Select Industry Index and the iShares Nasdaq Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. SPDR SP Biotech ETF has $5.99 billion in assets, iShares Nasdaq Biotechnology ETF has $9.95 billion. XBI has an expense ratio of 0.35% and IBB charges 0.47%.
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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