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5 Biggest Pharmaceutical ETFs in 2024
Investors may want to consider these five pharmaceutical ETFs as a way to gain exposure to the top big pharma companies.
The global pharmaceutical market reached a total value of US$1.6 trillion in 2023, according to Statista, up significantly from the US$888 billion seen just over a decade earlier in 2010.
Experienced and novice investors alike may want to consider pharmaceutical exchange-traded funds (ETFs) as a way to gain exposure to the top pharma companies. Like all ETFs, pharmaceutical ETFs are a good option for those who want to trade a set of assets in the pharmaceutical industry instead of focusing solely on individual pharmaceutical stocks.
The main advantage of a pharmaceutical ETF is the fact that it can provide exposure to an overarching sector, but still trades like a stock. Pharma ETFs also offer less market volatility and lower fees and expenses.
Big pharma ETFs
To help investors learn more about ETFs focused on the pharma sector, the Investing News Network presents the five top pharma ETFs by total assets under management, according to ETFdb.com.
Many of these funds have diverse holdings across some of the most important sectors in the pharmaceutical industry, including pain therapeutics, oncology, vaccines and biotechnology. Data was gathered on November 5, 2024.
1. VanEck Pharmaceutical ETF (NASDAQ:PPH)
Total assets under management: US$684.73 million
Established in late 2011, the VanEck Pharmaceutical ETF tracks the MVIS US Listed Pharmaceutical 25 Index. It has the capacity to provide big returns, even though there are some risks attached to the ETF. An analyst report indicates that investors looking for "tactical exposure" to the pharma sector might consider this ETF as an investment option.
The ETF has 26 holdings, with the top five being Eli Lilly with a weight of 12.32 percent, Novo Nordisk (NYSE:NVO) at 8.15 percent, Johnson & Johnson at 6.71 percent, AbbVie (NYSE:ABBV) at 6.67 percent and Bristol-Myers Squibb (NYSE:BMY) at 5.33 percent.
2. iShares US Pharmaceuticals ETF (ARCA:IHE)
Total assets under management: US$624.31 million
Created on May 5, 2006, this iShares ETF tracks some of the top US pharma companies. In total, the iShares US Pharmaceuticals ETF has 40 holdings, with the vast majority being large-cap stocks.
Of its holdings, Johnson & Johnson (NYSE:JNJ) and Eli Lilly (NYSE:LLY) are by far the largest portions in its portfolio, coming in at weightings of 22.27 percent and 20.3 percent, respectively. The next highest are Bristol-Myers Squibb at 5.29 percent, Viatris (NASDAQ:VTRS) at 4.68 percent and Pfizer (NYSE:PFE) at 4.34 percent.
3. Invesco Pharmaceuticals ETF (ARCA:PJP)
Total assets under management: US$281.23 million
The Invesco Pharmaceuticals ETF is primarily focused on providing exposure to US-based pharma companies. An analyst report states that this ETF chooses individual securities based on certain investment criteria, namely stock valuation and risk factors. Invesco changed the fund's name from the Invesco Dynamic Pharmaceuticals ETF in August 2023.
This ETF was started on June 23, 2005, and currently tracks 27 companies. Its top holdings are Abbott Laboratories (NYSE:ABT) with a weight of 5.86 percent, AbbVie at 6.67 percent, Johnson & Johnson at 5.47 percent, Amgen (NASDAQ:AMGN) at 5.46 percent and Pfizer at 5.43 percent.
4. SPDR S&P Pharmaceuticals ETF (ARCA:XPH)
Total assets under management: US$154.77 million
The SPDR S&P Pharmaceuticals ETF came into the market on June 19, 2006, and represents the pharmaceutical sub-industry sector of the S&P Total Markets Index. An analyst report for the ETF suggests that due to its narrow focus — which includes pharma giants that post "big returns" during times of consolidation — it should not be considered for a long-term portfolio.
This pharma ETF tracks 46 holdings, with relatively close weighting among its holdings. XPH's top five holdings are Corcept Therapeutics (NASDAQ:CORT) with a weight of 4.32 percent, Longboard Pharmaceuticals (NASDAQ:LBHP) at 4.13 percent, Intra-Cellular Therapies (NASDAQ:ITCI) at 3.97 percent, Bristol-Meyers Squibb at 3.82 percent and Edgewise Therapeutics (NASDAQ:EWTX) at 3.55 percent.
5. KraneShares MSCI All China Health Care Index ETF (ARCA:KURE)
Total assets under management: US$43.48 million
The KraneShares MSCI All China Health Care Index ETF was launched in February 2018 and tracks an index of large- and mid-cap Chinese stocks in the healthcare sector, all weighted by market capitalization. According to an analyst report, the fund provides investors with "exposure to a relatively small slice of the Chinese economy."
The ETF tracks 55 holdings, and its top five are Shenzhen Mindray Bio-Medical Electronics (SZSE:300760) at 8.18 percent, Jiangsu Hengrui Medicine (SHA:600276) at 7.71 percent, BeiGene (OTC Pink:BEIGF,HKEX:6160) at 6.62 percent, Wuxi Biologics (OTC Pink:WXIBF,HKEX:2269) at 4.47 percent and Zhangzhou Pientzehuang Pharmaceutical (SHA:600436) at 3.63 percent.
This is an updated version of an article originally published by the Investing News Network in 2016.
Don’t forget to follow us @INN_LifeScience for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no investment interest in any of the companies mentioned in this article.
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Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor's degree in English education as well as a master's degree in the teaching of writing, both from Humboldt State University, California.
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Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor's degree in English education as well as a master's degree in the teaching of writing, both from Humboldt State University, California.
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