The Invesco SP SmallCap Health Care ETF (PSCH) was launched on 04/07/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 5, placing it in top 31%.
The fund is sponsored by Invesco. It has amassed assets over $409.50 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. PSCH seeks to match the performance of the S&P SmallCap 600 Capped Health Care Index before fees and expenses.
This Index is comprised of common stocks of U.S. healthcare companies.These are companies that are principally engaged in the business of providing healthcare-related products & services, including biotechnology, pharmaceuticals, medical technology and supplies & facilities and this Index is a subset of the S&P SmallCap 600 Index.
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 0.29%, making it one of the least 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 100% of the portfolio.
Looking at individual holdings, Neogen Corp (NEOG) accounts for about 4.62% of total assets, followed by Momenta Pharmaceuticals Inc (MNTA) and Emergent Biosolutions Inc (EBS).
The top 10 holdings account for about 35.37% of total assets under management.
Performance and Risk
So far this year, PSCH has lost about -0.97%, and it's up approximately 10.34% in the last one year (as of 07/16/2020). During this past 52-week period, the fund has traded between $88.57 and $138.15.
The ETF has a beta of 1.18 and standard deviation of 27.39% for the trailing three-year period, making it a high risk choice in the space. With about 73 holdings, it effectively diversifies company-specific risk.
Invesco SP SmallCap Health Care 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, PSCH 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.
Vanguard Health Care ETF (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $11.34 billion in assets, Health Care Select Sector SPDR ETF has $23.73 billion. VHT has an expense ratio of 0.10% and XLV charges 0.13%.
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 SP SmallCap Health Care ETF (PSCH): ETF Research Reports
Momenta Pharmaceuticals, Inc. (MNTA) : Free Stock Analysis Report
Neogen Corporation (NEOG) : Free Stock Analysis Report
Emergent Biosolutions Inc. (EBS) : Free Stock Analysis Report
Health Care Select Sector SPDR ETF (XLV): ETF Research Reports
Vanguard Health Care ETF (VHT): ETF Research Reports
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