Introducing the VanEck Vectors Pharmaceutical ETF

* (Note: this is the first article in a series of three about pharmaceutical exchange-traded funds (ETFs) *

The pharmaceutical industry is one with two prongs.

There are the small, risky companies that let investors can gamble on purchasing in hopes they can find a buyer, while there also are the giants doing the buying and engaged in all sorts of research, development and production for various drugs. Today, we’re going to discuss a way to invest in the latter stocks through the VanEck Vectors Pharmaceutical ETF (PPH).

This fund invests in just 25 of the biggest and best pharmaceutical companies. For investors looking for exposure to the whole market segment, this investment is a simple one. Many of the larger holdings in this fund are household names or names you might hear about in television advertisements. Its holdings are chosen based on size and liquidity.

Over the last 12 months, this fund has posted a return of 11.43%. It has $227 million in assets, making it not too big, but not too small. PPH pays a modest 1.55% yield, and its expense ratio is 0.42%, which is nothing special. The fund has recovered from a precipitous fall in late March, like the rest of the market, and now is close to its pre-COVID-19 levels.

The top 10 holdings for this fund compose about half of its portfolio. Those stocks include Eli Lilly and Co. (LLY), 5.51%; AbbVie Inc. (ABBV), 5.14%; Novartis AG (NVS), 5.03%; Sanofi (SNY), 5.02%; and AstraZeneca Plc (AZN), 5.00%.

Plus, 63% of PPH’s holdings are based in the United States. The largest components of the remainder are based in the United Kingdom, Switzerland and France, with some of these representing only a single holding.

For investors looking to participate in the profits of the world’s leading names in pharmaceuticals, VanEck Vectors Pharmaceutical ETF (PPH) could be a convenient way to own them all in one place.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.