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

The Invesco Pharmaceuticals ETF (PJP) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Health Care ETFs category of the market.What Are Smart Beta ETFs?Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.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.These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexManaged by Invesco, PJP has amassed assets over $334 million, making it one of the average sized ETFs in the Health Care ETFs. This particular fund 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.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 this ETF, which makes it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.98%.Sector Exposure and Top HoldingsEven 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.PJP's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.When you look at individual holdings, Pfizer Inc (PFE) accounts for about 5.36% of the fund's total assets, followed by Merck & Co Inc (MRK) and Johnson & Johnson (JNJ).PJP's top 10 holdings account for about 47.27% of its total assets under management.Performance and RiskThe ETF has gained about 3.14% and it's up approximately 33.91% so far this year and in the past one year (as of 05/21/2026), respectively. PJP has traded between $78.89 and $110.52 during this last 52-week period. PJP has a beta of 0.46 and standard deviation of 15.42% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 33 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 $884.66 million in assets, VanEck Pharmaceutical ETF has $924.08 million. 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 >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks