Looking for broad exposure to the Healthcare - Pharma segment of the equity market? You should consider the First Trust NASDAQ Pharmaceuticals ETF (FTXH Quick QuoteFTXH - Free Report) , a passively managed exchange traded fund launched on September 20, 2016.

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.

Additionally, sector ETFs offer convenient 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 9, placing it in bottom 44%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $1.08 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Pharma segment of the equity market. FTXH seeks to match the performance of the Nasdaq US Smart Pharmaceuticals Index before fees and expenses.

The Nasdaq US Smart Pharmaceuticals Index is a modified factor weighted index, designed to provide exposure to US companies within the pharmaceuticals industry.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.6%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.69%.

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.

This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.

Looking at individual holdings, Merck & Co., Inc. (MRK) accounts for about 7.61% of total assets, followed by Johnson & Johnson (JNJ) and Abbvie Inc. (ABBV).

The top 10 holdings account for about 52.58% of total assets under management.

Performance and Risk

Year-to-date, the First Trust NASDAQ Pharmaceuticals ETF return is roughly 27.56% so far, and it's up approximately 52.34% over the last 12 months (as of 09/29/2026). FTXH has traded between $28.522 and $42.761 in this past 52-week period.

The ETF has a beta of 0.46 and standard deviation of 16.88% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.

Alternatives

First Trust NASDAQ Pharmaceuticals 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, FTXH is a good 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.

VanEck Pharmaceutical ETF (PPH) tracks MVIS US Listed Pharmaceutical 25 Index and the iShares U.S. Pharmaceuticals ETF (IHE) tracks Dow Jones U.S. Select Pharmaceuticals Index. VanEck Pharmaceutical ETF has $1.02 billion in assets, iShares U.S. Pharmaceuticals ETF has $1.68 billion. PPH has an expense ratio of 0.36%, and IHE charges 0.37%.

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.