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Should You Invest in the Invesco Dynamic Biotechnology Genome ETF (PBE)?

Zacks Equity Research
·4 min read

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 13, placing it in bottom 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $232.49 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 which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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, Pacific Biosciences Of California Inc (PACB) accounts for about 5.84% of total assets, followed by Qiagen Nv (QGEN) and Biogen Inc (BIIB).

The top 10 holdings account for about 45.11% of total assets under management.

Performance and Risk

The ETF has added roughly 10.18% so far this year and is up about 22.51% in the last one year (as of 11/08/2020). In that past 52-week period, it has traded between $39.70 and $62.86.

The ETF has a beta of 1.17 and standard deviation of 28.46% for the trailing three-year period, making it a high risk choice in the space. With about 31 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 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.

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 $5.78 billion in assets, iShares Nasdaq Biotechnology ETF has $9.57 billion. XBI has an expense ratio of 0.35% and IBB charges 0.46%.

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 Dynamic Biotechnology Genome ETF (PBE): ETF Research Reports
 
Biogen Inc. (BIIB) : Free Stock Analysis Report
 
QIAGEN N.V. (QGEN) : Free Stock Analysis Report
 
iShares Nasdaq Biotechnology ETF (IBB): ETF Research Reports
 
Pacific Biosciences of California, Inc. (PACB) : Free Stock Analysis Report
 
SPDR SP Biotech ETF (XBI): ETF Research Reports
 
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Zacks Investment Research