Investors looking at the VanEck Pharmaceutical ETF (NASDAQ:PPH) and the iShares U.S. Healthcare ETF (NYSEMKT:IYH) are really deciding between a concentrated bet on drugmakers and broad exposure to the entire domestic medical ecosystem. Both funds provide exposure to the defensive healthcare sector.
But while PPH focuses strictly on pharmaceutical giants, IYH casts a wider net, including medical device manufacturers, service providers, and biotechnology firms. Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-year return represents total return over the trailing 12 months.
Dividend yield is the trailing-12-month distribution yield. PPH is slightly cheaper, with an expense ratio of 0.36% compared to 0.38% for IYH. PPH also offers a higher dividend yield of 1.97% versus IYH's 1.17%.
Growth of $1,000 over 5 years (total return) IYH's broader number of holdings has translated into a modestly less volatile ride for shareholders -- with a lower maximum drawdown of 17.9% over the last five years. But despite its higher maximum drawdown, PPH achieved the better five-year return. Launched in 2000, IYH provides exposure to a wide variety of healthcare companies.
The fund holds 100 different positions. Its top holdings include Eli Lilly (NYSE:LLY) at 15.1%, Johnson & Johnson (NYSE:JNJ) at 10.2%, and AbbVie (NYSE:ABBV) at 7.3%. PPH focuses strictly on the pharmaceutical industry and maintains a more concentrated roster of 26 holdings.
Its largest positions include Eli Lilly at 19.1%, Novartis (NYSE:NVS) at 10.5%, and Merck (NYSE:MRK) at 9.8%. PPH was launched in 2011. For more guidance on ETF investing, check out the full guide at this link.
Extract — continue reading at the source.
