Is Invesco Building & Construction ETF (PKB) a Strong ETF Right Now?

Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco Building & Construction ETF (PKB) is a smart beta exchange traded fund launched on 10/26/2005.What Are Smart Beta ETFs?The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexManaged by Invesco, PKB has amassed assets over $419.78 million, making it one of the average sized ETFs in the Industrials ETFs. PKB seeks to match the performance of the Dynamic Building & Construction Intellidex Index before fees and expenses.The Dynamic Building & Construction Intellidex Index is comprised of stocks of U.S. building and construction companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.Cost & Other ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.Annual operating expenses for this ETF are 0.57%, making it on par with most peer products in the space.It's 12-month trailing dividend yield comes in at 0.22%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.For PKB, it has heaviest allocation in the Industrials sector --about 45.90% of the portfolio --while Materials and Consumer Discretionary round out the top three.Looking at individual holdings, Trane Technologies Plc (TT) accounts for about 5.38% of total assets, followed by Emcor Group Inc (EME) and Lennox International Inc (LII).The top 10 holdings account for about 47.41% of total assets under management.Performance and RiskThe ETF return is roughly 2.42% so far this year and is up about 25.12% in the last one year (as of 01/15/2025). In the past 52-week period, it has traded between $60.81 and $88.37.The fund has a beta of 1.39 and standard deviation of 26.18% for the trailing three-year period, which makes PKB a high risk choice in this particular space. With about 31 holdings, it has more concentrated exposure than peers.AlternativesInvesco Building & Construction ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.SPDR S&P Homebuilders ETF (XHB) tracks S&P Homebuilders Select Industry Index. The fund has $1.80 billion in assets. XHB has an expense ratio of 0.35%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.Bottom LineTo 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 key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 Building & Construction ETF (PKB): ETF Research Reports Lennox International, Inc. (LII): Free Stock Analysis Report EMCOR Group, Inc. (EME): Free Stock Analysis Report SPDR S&P Homebuilders ETF (XHB): ETF Research Reports Trane Technologies plc (TT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks