How Pharmaceutical ETFs Have Performed in 2018

Pharmaceutical ETFs are securities that are publicly traded on stock markets designed for investors who don’t have the capacity to hold many stocks but are interested in diversification within the pharmaceutical sector.

Besides diversification, ETFs have other benefits, such as the ability to sell short, buy on margin, and purchase even a single unit. The expense ratios for ETFs are also much lower than those for mutual funds.

The above chart compares a variety of pharmaceutical ETFs and their YTD (year-to-date) returns.

The SPDR S&P Pharmaceuticals ETF (XPH) is focused on both drug manufacturers and biotechnology companies. The fund tracks an index that represents the pharmaceutical subindustry portion of the S&P Total Market Index. The fund has been operational since 2006, and its market cap is ~$403.8 million as of September 14, 2018. It has risen ~12.3% YTD.

The VanEck Vectors Pharmaceutical ETF (PPH) is focused on large drug manufacturing companies. The fund has been operational since 2011, and its market cap is ~$291.1 million as of September 14. It has risen ~6.9% YTD.

The Invesco Dynamic Pharmaceuticals ETF (PJP) is focused on both drug manufacturers and biotechnology companies. The fund has been operational since 2005, and its market cap is ~$620.6 million as of September 14. It has risen ~13.1% YTD.

The iShares U.S. Pharmaceuticals ETF (IHE) is focused on large drug manufacturing companies. The fund has been operational since 2006, and its market cap is ~$469.8 million as of September 14. It has risen ~8.7% YTD.

The Healthcare Select Sector SPDR ETF (XLV) is focused on pharmaceutical and biotechnology companies. The fund has been operational since 1998, and its market cap is ~$18.5 billion as of September 14. It has risen ~13.5% YTD.

The SPDR S&P Pharmaceuticals ETF holds ~5.0% of its total investments in Eli Lilly and Company (LLY), 4.7% in Pfizer (PFE), 4.5% in Merck & Co. (MRK), and 4.5% in Allergan (AGN).