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

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.

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.

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 2, placing it in top 13%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $228.42 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

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 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 98.80% of the portfolio.

Looking at individual holdings, Exact Sciences Corp (EXAS) accounts for about 5.26% of total assets, followed by Ptc Therapeutics Inc (PTCT) and Unitedhealth Group Inc (UNH).

The top 10 holdings account for about 33.84% of total assets under management.

Performance and Risk

The ETF has added about 5.65% and it's up approximately 9.57% so far this year and in the past one year (as of 12/17/2018), respectively. PTH has traded between $69.94 and $98.76 during this last 52-week period.

The ETF has a beta of 1.42 and standard deviation of 24.50% for the trailing three-year period, making it a high risk choice in the space. With about 46 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 excellent 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 $8.56 B in assets, Health Care Select Sector SPDR Fund has $19.02 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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PWRSH-DW HLT MO (PTH): ETF Research Reports
 
SPDR-HLTH CR (XLV): ETF Research Reports
 
VIPERS-HLTH CR (VHT): ETF Research Reports
 
Exact Sciences Corporation (EXAS) : Free Stock Analysis Report
 
PTC Therapeutics, Inc. (PTCT) : Free Stock Analysis Report
 
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
 
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