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.
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 16, placing it in bottom 0%.
The fund is sponsored by Van Eck. It has amassed assets over $346.72 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 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Astrazeneca Plc (
AZN Quick Quote AZN - Free Report) accounts for about 5.19% of total assets, followed by Merck & Co Inc ( MRK Quick Quote MRK - Free Report) and Bristol-Myers Squibb Co ( BMY Quick Quote BMY - Free Report) .
The top 10 holdings account for about 50.13% of total assets under management.
Performance and Risk
So far this year, PPH has gained about 17.25%, and was up about 20.57% in the last one year (as of 08/18/2021). During this past 52-week period, the fund has traded between $58.91 and $77.22.
The ETF has a beta of 0.88 and standard deviation of 20.79% 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 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 a great 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.
IShares U.S. Pharmaceuticals ETF (
IHE Quick Quote IHE - Free Report) tracks Dow Jones U.S. Select Pharmaceuticals Index and the Invesco Dynamic Pharmaceuticals ETF ( PJP Quick Quote PJP - Free Report) tracks Dynamic Pharmaceutical Intellidex Index. IShares U.S. Pharmaceuticals ETF has $396.96 million in assets, Invesco Dynamic Pharmaceuticals ETF has $455.77 million. IHE has an expense ratio of 0.42% and PJP charges 0.56%. Bottom Line
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Zacks ETF Center.