New York City, New York – With the healthcare industry showing consistent historical growth and a promising future, investors are looking towards small-cap stocks in the sector for potential opportunities. The ability of healthcare companies to adapt to changing market conditions and regulations makes it a focal point for those seeking growth in their investment portfolios. One notable option for investors seeking exposure to small-cap healthcare stocks is the Invesco S&P SmallCap Health Care ETF (PSCH).

PSCH predominantly invests in US-based small-cap healthcare companies, offering investors a way to access this specific segment of the market. Since its inception on April 7, 2010, the ETF has grown to manage assets valued at over $217 million. The fund aims to mirror the performance of the S&P SmallCap 600 Capped Health Care Index, which tracks the overall performance of common stocks in the healthcare sector.

As a passively managed fund, PSCH focuses on replicating the performance of its benchmark index rather than actively selecting stocks to outperform the market. This strategy results in lower costs, with an annual operating expense of just 0.29%, making PSCH a cost-effective option for investors seeking exposure to small-cap healthcare companies.

Diversification is a key aspect of the fund, with PSCH holding 67 stocks in its portfolio. The top 10 holdings represent approximately 36% of total assets under management, providing investors with broad exposure to different companies within the healthcare sector. Key holdings include companies like Ensign Group Inc., Organon & Co, Alkermes Plc, Glaukos Corp, and Merit Medical Systems Inc.

In terms of sector composition, PSCH invests 100% of its assets in the healthcare sector, further diversified across subsectors like Providers & Services, and Equipment & Supplies. A comparison with similar ETFs such as the Vanguard Health Care ETF (VHT) and the Health Care Select Sector SPDR ETF (XLV) reveals PSCH’s focus on small-cap stocks, presenting a potential catch-up momentum trade opportunity for investors.

Despite the advantages of exposure to high-growth potential in small-cap healthcare companies, investors should also consider the higher degree of volatility and risk associated with these stocks compared to larger counterparts. The Invesco S&P SmallCap Health Care ETF remains an attractive option for investors looking to capitalize on growth opportunities within the healthcare sector while considering the risks involved in small-cap investments.