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?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.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.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexThe fund is managed by Invesco, and has been able to amass over $239.95 million, which makes it one of the average sized ETFs in the Health Care ETFs. PJP, before fees and expenses, seeks to match the performance of the Dynamic Pharmaceutical Intellidex Index.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 ExpensesFor ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.Operating expenses on an annual basis are 0.56% for PJP, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 1.16%.Sector Exposure and Top HoldingsETFs offer 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.For PJP, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.When you look at individual holdings, Eli Lilly & Co (LLY) accounts for about 5.41% of the fund's total assets, followed by Amgen Inc (AMGN) and Pfizer Inc (PFE).PJP's top 10 holdings account for about 46.64% of its total assets under management.Performance and RiskSo far this year, PJP has added roughly 0.8%, and is up roughly 2.82% in the last one year (as of 07/10/2025). During this past 52-week period, the fund has traded between $74.59 and $89.61.The fund has a beta of 0.47 and standard deviation of 15.71% for the trailing three-year period, which makes PJP a high risk choice in this particular space. With about 31 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 $564.14 million in assets, VanEck Pharmaceutical ETF has $593.54 million. IHE has an expense ratio of 0.39% 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.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 ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks