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

Zacks Equity Research
Sector ETF report for PTH

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.

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 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 2, placing it in top 13%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $200.98 M, 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

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 0.60%, making it one of the more 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 98.20% of the portfolio.

Looking at individual holdings, Exact Sciences Corp (EXAS) accounts for about 7.14% of total assets, followed by Amedisys Inc (AMED) and Masimo Corp (MASI).

The top 10 holdings account for about 39.27% of total assets under management.

Performance and Risk

Year-to-date, the Invesco DWA Healthcare Momentum ETF return is roughly 12.94% so far, and is up about 3.22% over the last 12 months (as of 03/25/2019). PTH has traded between $64.96 and $98.76 in this past 52-week period.

The ETF has a beta of 1.53 and standard deviation of 23.86% for the trailing three-year period, making it a high risk choice in the space. With about 45 holdings, it has more concentrated exposure than peers.

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 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 Fund (XLV) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $9.28 B in assets, Health Care Select Sector SPDR Fund has $19.26 B. 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.


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Invesco DWA Healthcare Momentum ETF (PTH): ETF Research Reports
 
Health Care Select Sector SPDR Fund (XLV): ETF Research Reports
 
Vanguard Health Care ETF (VHT): ETF Research Reports
 
Masimo Corporation (MASI) : Free Stock Analysis Report
 
Exact Sciences Corporation (EXAS) : Free Stock Analysis Report
 
Amedisys, Inc. (AMED) : Free Stock Analysis Report
 
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