Should You Invest in the Invesco Pharmaceuticals ETF (PJP)?

If you're interested in broad exposure to the Healthcare - Pharma segment of the equity market, look no further than the Invesco Pharmaceuticals ETF (PJP), 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 - Pharma is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.Index DetailsThe fund is sponsored by Invesco. It has amassed assets over $265.40 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Pharma segment of the equity market. PJP seeks to match the performance of the Dynamic Pharmaceutical Intellidex Index before fees and expenses.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.CostsInvestors 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 0.56%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.93%.Sector Exposure and Top HoldingsETFs 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, Eli Lilly & Co (LLY) accounts for about 5.38% of total assets, followed by Pfizer Inc (PFE) and Abbvie Inc (ABBV).The top 10 holdings account for about 46.65% of total assets under management.Performance and RiskThe ETF has added roughly 4.64% so far this year and was up about 12.35% in the last one year (as of 02/13/2025). In that past 52-week period, it has traded between $75.33 and $89.61.The ETF has a beta of 0.57 and standard deviation of 15.54% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.AlternativesInvesco Pharmaceuticals 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, PJP is an outstanding 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.VanEck Pharmaceutical ETF (PPH) tracks MVIS US Listed Pharmaceutical 25 Index and the iShares U.S. Pharmaceuticals ETF (IHE) tracks Dow Jones U.S. Select Pharmaceuticals Index. VanEck Pharmaceutical ETF has $544.45 million in assets, iShares U.S. Pharmaceuticals ETF has $617.97 million. PPH has an expense ratio of 0.36% and IHE charges 0.39%.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 Pharmaceuticals ETF (PJP): ETF Research Reports Pfizer Inc. (PFE): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis Report iShares U.S. Pharmaceuticals ETF (IHE): ETF Research Reports VanEck Pharmaceutical ETF (PPH): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks