If you're interested in broad exposure to the Healthcare - Pharma segment of the equity market, look no further than the VanEck Vectors Pharmaceutical ETF (
PPH Quick Quote PPH - Free Report) , a passively managed exchange traded fund launched on 12/20/2011.
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.
Sector ETFs are also funds of convenience, offering many ways 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 13, placing it in bottom 19%.
The fund is sponsored by Van Eck. It has amassed assets over $249.80 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 1.60%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Novo Nordisk A/s (
NVO Quick Quote NVO - Free Report) accounts for about 5.23% of total assets, followed by Astrazeneca Plc ( AZN Quick Quote AZN - Free Report) and Bristol-Myers Squibb Co ( BMY Quick Quote BMY - Free Report) .
The top 10 holdings account for about 50.02% of total assets under management.
Performance and Risk
So far this year, PPH has added about 0.09%, and is up about 9.51% in the last one year (as of 11/09/2020). During this past 52-week period, the fund has traded between $47.54 and $67.62.
The ETF has a beta of 0.88 and standard deviation of 21.32% 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 $319.70 million in assets, iShares U.S. Pharmaceuticals ETF has $369.45 million. PJP has an expense ratio of 0.56% and IHE charges 0.42%. 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.