Is Invesco Pharmaceuticals ETF (PJP) a Strong ETF Right Now?

Launched on 06/23/2005, the Invesco Pharmaceuticals ETF (PJP) is a smart beta exchange traded fund offering broad exposure to the Health Care ETFs category of the market.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.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexPJP is managed by Invesco, and this fund has amassed over $393.14 million, which makes it one of the average sized ETFs in the Health Care ETFs. Before fees and expenses, PJP seeks to match the performance of the Dynamic Pharmaceutical Intellidex Index.The Dynamic Pharmaceutical Intellidex Index is comprised of stocks of U.S. pharmaceutical companies. It 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 ExpensesExpense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.Operating expenses on an annual basis are 0.57% for PJP, making it on par with most peer products in the space.The fund has a 12-month trailing dividend yield of 1.00%.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.PJP's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.When you look at individual holdings, Gilead Sciences Inc (GILD) accounts for about 5.86% of the fund's total assets, followed by Merck & Co Inc (MRK) and Johnson & Johnson (JNJ).The top 10 holdings account for about 49.3% of total assets under management.Performance and RiskSo far this year, PJP has lost about -2.44%, and was up about 22.83% in the last one year (as of 03/16/2026). During this past 52-week period, the fund has traded between $74.59 and $110.52.PJP has a beta of 0.47 and standard deviation of 15.13% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 34 holdings, it has more concentrated exposure than peers .AlternativesInvesco Pharmaceuticals ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.iShares U.S. Pharmaceuticals ETF (IHE) tracks Dow Jones U.S. Select Pharmaceuticals Index and the VanEck Pharmaceutical ETF (PPH) tracks MVIS US Listed Pharmaceutical 25 Index. iShares U.S. Pharmaceuticals ETF has $994.75 million in assets, VanEck Pharmaceutical ETF has $1.27 billion. IHE has an expense ratio of 0.38% and PPH changes 0.36%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFsBottom 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>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 Pharmaceuticals ETF (PJP): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks