Both ETFs offer investors a way to profit from advances in medicine, but a closer look reveals a clear winner.
Both ETFs offer investors a way to profit from advances in medicine, but a closer look reveals a clear winner.
The Invesco Pharmaceuticals ETF (PJP -0.51%) offers a lower-volatility approach to healthcare than the Invesco Biotechnology & Genome ETF (PBE +0.35%), which prioritizes high-growth but more volatile firms specializing in genomic research and biochemical engineering.
Investors seeking healthcare exposure often choose between established pharmaceutical giants and high-stakes biotechnology innovators. While both funds are issued by Invesco and focus exclusively on domestic companies, their distinct sub-industry concentrations lead to significantly different risk profiles and historical total return outcomes for long-term shareholders.
Snapshot (cost & size)
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
These funds are priced nearly identically, with only a one-basis-point difference in their annual expense ratios. However, the Invesco Biotechnology & Genome ETF provides a more substantial income component, offering a trailing dividend yield approximately 0.5 percentage points higher than its pharmaceutical-focused sibling.
Performance & risk comparison
Invesco Pharmaceuticals ETF generally invests at least 90% of its assets in the 28 U.S. pharmaceutical companies that make up its underlying index. These companies are primarily engaged in the research, development, and distribution of various drugs. Its largest positions include AbbVie, Inc. (ABBV -1.48%) at 5.98%, Pfizer, Inc. (PFE -0.86%) at 5.79%, and Gilead Sciences, Inc. (GILD -1.88%) at 5.78%. The fund was launched in 2005. It has paid $1.13 per share over the trailing 12 months, which on its recent ~$125.1 share price works out to a 0.9% yield.
Invesco Biotechnology & Genome ETF similarly allocates 90% of its assets to 32 U.S. companies. It uses a dynamic index that evaluates firms based on price momentum, earnings growth, and management decisions within the biotech sector. Its top holdings include Natera, Inc. (NTRA +1.84%) at 6.05%, Illumina, Inc. (ILMN +5.57%) at 5.95%, and Biogen, Inc. (BIIB -0.87%) at 5.39%. It was launched in 2005. It has paid $1.33 per share over the trailing 12 months, which on its recent ~$98.7 share price works out to a 1.34% yield.
For more guidance on ETF investing, check out the full guide at this link.
Averytin News Financial update.