If you’re interested in broad exposure to the Healthcare – Broad segment of the equity market, look no further than the Invesco S&P SmallCap Health Care ETF (PSCH), a passively managed exchange traded fund launched on 04/07/2010.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversify 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 3, placing it in the top 19%.
The fund is sponsored by Invesco. It has amass assets of over $301.60 million, making it one of the average sized ETFs trying 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.
The S&P SmallCap 600 Capped Health Care Index measures the overall performance of common stocks in the health care sector.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund’s holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has the heaviest allocation in the Healthcare sector–about 100% of the portfolio.
Looking at individual holdings, Ensign Group Inc/the (ENSG) accounts for about 5.44% of total assets, followed by Amn Healthcare Services Inc (AMN) and Cytokinetics Inc (CYTK).
The top 10 holdings account for about 33.27% of total assets under management.
Performance and Risk
The ETF has lost about -2.33% so far this year and is down about -15.73% in the last one year (as of 03/16/2023). In that past 52-week period, it has traded between $126.33 and $165.01.
The ETF has a beta of 0.99 and a standard deviation of 28.67% for the trailing three-year period, making it a high risk choice in space. With about 83 holdings, it effectively diversifies company-specific risks.
Invesco S&P 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 reasonable 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.
The Vanguard Health Care ETF (VHT) tracks the 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 $16.28 billion in assets, Health Care Select Sector SPDR ETF has $38.04 billion. VHT has an expense ratio of 0.10% and XLV charges 0.10%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on the latest developments in the ETF investing universe, please visit the Zacks ETF Center.
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Invesco S&P SmallCap Health Care ETF (PSCH): ETF Research Reports
AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report
Cytokinetics, Incorporated (CYTK) : Free Stock Analysis Report
Health Care Select Sector SPDR ETF (XLV): ETF Research Reports
Vanguard Health Care ETF (VHT): ETF Research Reports
The Ensign Group, Inc. (ENSG) : Free Stock Analysis Report
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Zacks Investment Research