Should You Invest in the Invesco Building & Construction ETF (PKB)?

The Invesco Building & Construction ETF (PKB) was launched on 10/26/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Engineering and Construction segment of the equity market.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Engineering and Construction is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $217.83 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Engineering and Construction segment of the equity market. PKB seeks to match the performance of the Dynamic Building & Construction Intellidex Index before fees and expenses.

The Dynamic Building & Construction Intellidex Index is comprised of stocks of U.S. building and construction companies. The Index 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.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.57%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.21%.

Sector Exposure and Top Holdings

Even 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.

This ETF has heaviest allocation in the Industrials sector--about 54.80% of the portfolio. Materials and Consumer Discretionary round out the top three.

Looking at individual holdings, Martin Marietta Materials Inc (MLM) accounts for about 5.33% of total assets, followed by Vulcan Materials Co (VMC) and Trane Technologies Plc (TT).

The top 10 holdings account for about 46.24% of total assets under management.

Performance and Risk

The ETF has lost about -3.05% and is up roughly 4.92% so far this year and in the past one year (as of 05/05/2025), respectively. PKB has traded between $62.05 and $88.37 during this last 52-week period.

The ETF has a beta of 1.27 and standard deviation of 26.84% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Building & Construction ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. PKB, then, is not a suitable option for investors seeking exposure to the Industrials ETFs segment of the market. Instead, there are better ETFs in the space to consider.

SPDR S&P Homebuilders ETF (XHB) tracks S&P Homebuilders Select Industry Index. The fund has $1.40 billion in assets. XHB has an expense ratio of 0.35%.

Bottom Line

To 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.

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This article originally published on Zacks Investment Research (zacks.com).

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