Should You Invest in the VanEck Vectors Pharmaceutical ETF (PPH)?
The VanEck Vectors Pharmaceutical ETF (PPH) was launched on 12/20/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Pharma segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Healthcare - Pharma is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
Index Details
The fund is sponsored by Van Eck. It has amassed assets over $232.10 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.
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 0.36%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.75%.
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, Abbvie Inc (ABBV) accounts for about 5.89% of total assets, followed by Astrazeneca Plc (AZN) and Pfizer Inc (PFE).
The top 10 holdings account for about 52.50% of total assets under management.
Performance and Risk
Year-to-date, the VanEck Vectors Pharmaceutical ETF has lost about -6.80% so far, and it's up approximately 2.60% over the last 12 months (as of 05/28/2020). PPH has traded between $47.54 and $67.62 in this past 52-week period.
The ETF has a beta of 0.92 and standard deviation of 20.54% 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.
Alternatives
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) tracks Dow Jones U.S. Select Pharmaceuticals Index and the Invesco Dynamic Pharmaceuticals ETF (PJP) tracks Dynamic Pharmaceutical Intellidex Index. IShares U.S. Pharmaceuticals ETF has $356.04 million in assets, Invesco Dynamic Pharmaceuticals ETF has $359.96 million. IHE has an expense ratio of 0.42% and PJP charges 0.56%.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
VanEck Vectors Pharmaceutical ETF (PPH): ETF Research Reports
AstraZeneca PLC (AZN) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
Invesco Dynamic Pharmaceuticals ETF (PJP): ETF Research Reports
iShares U.S. Pharmaceuticals ETF (IHE): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
