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

Zacks Equity Research

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

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 are also funds of convenience, offering many 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 3, placing it in top 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $202.65 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

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 one of the more 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 98.20% of the portfolio.

Looking at individual holdings, Exact Sciences Corp (EXAS) accounts for about 7.36% of total assets, followed by Amedisys Inc (AMED) and Cigna Corp (CI).

The top 10 holdings account for about 40.61% of total assets under management.

Performance and Risk

So far this year, PTH return is roughly 13.88%, and was up about 8.40% in the last one year (as of 02/13/2019). During this past 52-week period, the fund has traded between $64.96 and $98.76.

The ETF has a beta of 1.53 and standard deviation of 24.29% 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 holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PTH is an outstanding option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

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 $9.05 B in assets, Health Care Select Sector SPDR Fund has $19.18 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
 
Cigna Corporation (CI) : Free Stock Analysis Report
 
Exact Sciences Corporation (EXAS) : Free Stock Analysis Report
 
Amedisys, Inc. (AMED) : Free Stock Analysis Report
 
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