Looking for broad exposure to the Healthcare - Pharma segment of the equity market? You should consider 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.
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 3, placing it in top 19%.
The fund is sponsored by Van Eck. It has amassed assets over $248.97 M, 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 1.80%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Novo Nordisk A/s (NVO) accounts for about 5.18% of total assets, followed by Johnson & Johnson (JNJ) and Pfizer Inc (PFE).
The top 10 holdings account for about 49.52% of total assets under management.
Performance and Risk
Year-to-date, the VanEck Vectors Pharmaceutical ETF has lost about -1.54% so far, and it's up approximately 5.87% over the last 12 months (as of 03/05/2020). PPH has traded between $54.74 and $67.62 in this past 52-week period.
The ETF has a beta of 0.97 and standard deviation of 15.59% 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 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.
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 $330.43 M in assets, Invesco Dynamic Pharmaceuticals ETF has $351.06 M. IHE has an expense ratio of 0.42% and PJP charges 0.56%. Bottom Line
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Zacks ETF Center.