Better Biotech ETF: First Trust's FBT vs. Invesco's PBE

详细摘要

Both biotech ETFs hold about 30 healthcare names, but their index methods and fees differ enough to shape results for investors weighing sector exposure.

The First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) provides a lower expense ratio and larger assets under management (AUM) compared to the Invesco Biotechnology & Genome ETF (NYSEMKT:PBE), which utilizes a multi-factor quantitative index.

Biotechnology remains a high-stakes cornerstone of healthcare innovation, driven by genetic breakthroughs and therapeutic research. However, the inherent volatility of the industry makes individual stock picking a challenge for many investors.

The Invesco Biotechnology & Genome ETF and the First Trust NYSE Arca Biotechnology Index Fund serve as primary vehicles for broad sector exposure, though they rely on very different index-tracking strategies to navigate the complex field of drug development and medical services.

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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

Selecting between these two biotech funds often comes down to cost and liquidity. The First Trust fund is the more affordable option here with an expense ratio of 0.55%, whereas the Invesco fund carries a slightly higher 0.59% fee.

The First Trust fund is designed to accurately reflect the price movements of the NYSE Arca Biotechnology Index, a benchmark that targets companies involved in medical research and diagnostic testing. It maintains a streamlined portfolio of 30 positions and allocates 100% of its capital to the healthcare sector. Its largest positions include Genmab A/S (ADR) (NASDAQ:GMAB) at 4.76%, Regeneron Pharmaceuticals (NASDAQ:REGN) at 4.00%, and ADMA Biologics (NASDAQ:ADMA) at 3.99%. This fund was launched in 2006.

The Invesco fund follows the Dynamic Biotech & Genome Intellidex Index, a multi-factor benchmark that thoroughly evaluates companies based on investment criteria such as price momentum, earnings growth, and…

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