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Should You Invest in the Invesco DWA Healthcare Momentum ETF (PTH)?

Zacks Equity Research
·3 min read

Launched on 10/12/2006, the Invesco DWA Healthcare Momentum ETF (PTH) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Broad segment of the equity market.

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.

Additionally, sector ETFs offer convenient 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 13, placing it in bottom 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $589.25 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. PTH seeks to match the performance of the DWA Healthcare Technical Leaders Index before fees and expenses.

The DWA Healthcare Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

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, Amedisys Inc (AMED) accounts for about 5.21% of total assets, followed by Danaher Corp (DHR) and Thermo Fisher Scientific Inc (TMO).

The top 10 holdings account for about 40.58% of total assets under management.

Performance and Risk

So far this year, PTH has added about 57.88%, and it's up approximately 88.77% in the last one year (as of 11/08/2020). During this past 52-week period, the fund has traded between $71.82 and $151.09.

The ETF has a beta of 1.16 and standard deviation of 30.84% for the trailing three-year period, making it a high risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco DWA Healthcare Momentum 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, PTH 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.

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 $12.14 billion in assets, Health Care Select Sector SPDR ETF has $24.12 billion. VHT has an expense ratio of 0.10% and XLV charges 0.13%.

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.


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 DWA Healthcare Momentum ETF (PTH): ETF Research Reports
 
Amedisys, Inc. (AMED) : Free Stock Analysis Report
 
Danaher Corporation (DHR) : Free Stock Analysis Report
 
Thermo Fisher Scientific Inc. (TMO) : 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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Zacks Investment Research