Designed to provide broad exposure to the Healthcare - Pharma segment of the equity market, the VanEck Vectors Pharmaceutical ETF (
PPH Quick Quote PPH - Free Report) is 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 10, placing it in bottom 38%.
The fund is sponsored by Van Eck. It has amassed assets over $233.76 million, making it one of the average sized 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.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.36%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.64%.
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 And Co (
LLY Quick Quote LLY - Free Report) accounts for about 5.30% of total assets, followed by Pfizer Inc ( PFE Quick Quote PFE - Free Report) and Astrazeneca Plc ( AZN Quick Quote AZN - Free Report) .
The top 10 holdings account for about 50.01% of total assets under management.
Performance and Risk
The ETF has added about 0.98% and is up roughly 16.58% so far this year and in the past one year (as of 08/31/2020), respectively. PPH has traded between $47.54 and $67.62 during this last 52-week period.
The ETF has a beta of 0.90 and standard deviation of 20.93% 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.
VanEck Vectors Pharmaceutical ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PPH is a sufficient option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco Dynamic Pharmaceuticals ETF (
PJP Quick Quote PJP - Free Report) tracks Dynamic Pharmaceutical Intellidex Index and the iShares U.S. Pharmaceuticals ETF ( IHE Quick Quote IHE - Free Report) tracks Dow Jones U.S. Select Pharmaceuticals Index. Invesco Dynamic Pharmaceuticals ETF has $339.98 million in assets, iShares U.S. Pharmaceuticals ETF has $355.84 million. PJP has an expense ratio of 0.56% and IHE charges 0.42%. Bottom Line
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