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

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·4 min read
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The Invesco DWA Healthcare Momentum ETF (PTH) was launched on 10/12/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Broad segment of the equity market.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options 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 14, placing it in bottom 13%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $479.63 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

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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

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, Moderna Inc (MRNA) accounts for about 5.49% of total assets, followed by Idexx Laboratories Inc (IDXX) and Horizon Therapeutics Plc (HZNP).

The top 10 holdings account for about 36.69% of total assets under management.

Performance and Risk

The ETF has lost about -1.72% and it's up approximately 7.15% so far this year and in the past one year (as of 10/15/2021), respectively. PTH has traded between $136.47 and $188.39 during this last 52-week period.

The ETF has a beta of 0.97 and standard deviation of 32.62% for the trailing three-year period, making it a high risk choice in the space. With about 56 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 $15.95 billion in assets, Health Care Select Sector SPDR ETF has $29.72 billion. VHT has an expense ratio of 0.10% and XLV charges 0.12%.

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
 
Moderna, Inc. (MRNA) : Free Stock Analysis Report
 
IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report
 
Horizon Therapeutics Public Limited Company (HZNP) : 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