Looking for broad exposure to the Healthcare - Pharma segment of the equity market? You should consider the VanEck Pharmaceutical ETF (PPH), a passively managed exchange traded fund launched on 12/20/2011.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Pharma is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Van Eck. It has amassed assets over $642.84 million, making it one of the larger ETFs attempting to match the performance of the Healthcare - Pharma segment of the equity market. PPH seeks to match the performance of the MVIS US Listed Pharmaceutical 25 Index before fees and expenses.
The MVIS US Listed Pharmaceutical 25 Index tracks the overall performance of companies involved in pharmaceuticals, including pharmaceutical research and development as well a production, marketing and sales of pharmaceuticals.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.36%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.83%.
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.
Looking at individual holdings, Eli Lilly & Co (LLY) accounts for about 14.71% of total assets, followed by Abbvie Inc (ABBV) and Johnson & Johnson (JNJ).
The top 10 holdings account for about 65.74% of total assets under management.
Performance and Risk
The ETF has added roughly 7.99% and it's up approximately 5.91% so far this year and in the past one year (as of 03/20/2025), respectively. PPH has traded between $84.87 and $99.43 during this last 52-week period.
The ETF has a beta of 0.61 and standard deviation of 13.41% for the trailing three-year period, making it a medium risk choice in the space. With about 26 holdings, it has more concentrated exposure than peers.
Alternatives
VanEck Pharmaceutical ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PPH is an excellent option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco Pharmaceuticals ETF (PJP) tracks Dynamic Pharmaceutical Intellidex Index and the iShares U.S. Pharmaceuticals ETF (IHE) tracks Dow Jones U.S. Select Pharmaceuticals Index. Invesco Pharmaceuticals ETF has $258.82 million in assets, iShares U.S. Pharmaceuticals ETF has $619.17 million. PJP has an expense ratio of 0.56% and IHE charges 0.39%.
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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Get it free >>VanEck Pharmaceutical ETF (PPH): ETF Research Reports
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
Invesco Pharmaceuticals ETF (PJP): ETF Research Reports
iShares U.S. Pharmaceuticals ETF (IHE): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
