Designed to provide broad exposure to the Industrials - Engineering and Construction segment of the equity market, the Invesco Building & Construction ETF (PKB) is a passively managed exchange traded fund launched on 10/26/2005.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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. Industrials - Engineering and Construction is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $403.92 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Engineering and Construction segment of the equity market. 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.
Costs
Investors 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 0.57%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.23%.
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 Industrials sector--about 45.70% of the portfolio. Materials and Consumer Discretionary round out the top three.
Looking at individual holdings, Home Depot Inc/the (HD) accounts for about 5.07% of total assets, followed by Trane Technologies Plc (TT) and Emcor Group Inc (EME).
The top 10 holdings account for about 45.79% of total assets under management.
Performance and Risk
The ETF return is roughly 21.60% so far this year and it's up approximately 20.74% in the last one year (as of 12/30/2024). In that past 52-week period, it has traded between $60.78 and $88.37.
The ETF has a beta of 1.36 and standard deviation of 26.17% for the trailing three-year period, making it a high risk choice in the space. With about 36 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Building & Construction 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, PKB is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Homebuilders ETF (XHB) tracks S&P Homebuilders Select Industry Index. The fund has $1.87 billion in assets. XHB has an expense ratio of 0.35%.
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.
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Invesco Building & Construction ETF (PKB): ETF Research Reports
The Home Depot, Inc. (HD) : 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 Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
