Dj Alnylam Pharmaceuticals Inc, Inst Holders, 3Q 2024 (Alny)

If you're interested in broad exposure to the Healthcare - Biotech segment of the equity market, look no further than the Invesco Biotechnology & Genome ETF (PBE), a passively managed exchange traded fund launched on 06/23/2005.

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.

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 - Biotech 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 $249.41 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.

The Dynamic Biotech & Genome Intellidex Index seeks to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.58%, 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

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 99.80% of the portfolio.

Looking at individual holdings, Illumina Inc (ILMN) accounts for about 5.92% of total assets, followed by United Therapeutics Corp (UTHR) and Alnylam Pharmaceuticals Inc (ALNY).

The top 10 holdings account for about 45.06% of total assets under management.

Performance and Risk

So far this year, PBE has gained about 1.19%, and is up about 18.40% in the last one year (as of 11/20/2024). During this past 52-week period, the fund has traded between $56.35 and $72.24.

The ETF has a beta of 0.80 and standard deviation of 23.63% for the trailing three-year period, making it a high risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Biotechnology & Genome 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, PBE is a great 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.

IShares Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index and the SPDR S&P Biotech ETF (XBI) tracks S&P Biotechnology Select Industry Index. IShares Biotechnology ETF has $6.63 billion in assets, SPDR S&P Biotech ETF has $7.23 billion. IBB has an expense ratio of 0.45% and XBI charges 0.35%.

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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