Looking for broad exposure to the Healthcare - Broad segment of the equity market? You should consider the Invesco S&P SmallCap Health Care ETF (PSCH), a passively managed exchange traded fund launched on 04/07/2010.
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.
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 7, placing it in top 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $323.72 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.
The S&P SmallCap 600 Capped Health Care Index measures the overall performance of common stocks in the health care sector.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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
While 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.
This ETF has 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 gained about 2.98% so far this year and is down about -19.74% in the last one year (as of 01/12/2023). In that past 52-week period, it has traded between $126.33 and $165.41.
The ETF has a beta of 1 and standard deviation of 30.14% for the trailing three-year period, making it a high risk choice in the space. With about 83 holdings, it effectively diversifies company-specific risk.
Alternatives
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 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 $17.26 billion in assets, Health Care Select Sector SPDR ETF has $41.91 billion. VHT has an expense ratio of 0.10% and XLV charges 0.10%.
Bottom Line
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.
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 >>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
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
