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Should You Invest in the iShares U.S. Pharmaceuticals ETF (IHE)?
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Looking for broad exposure to the Healthcare - Pharma segment of the equity market? You should consider the iShares U.S. Pharmaceuticals ETF (IHE - Free Report) , a passively managed exchange traded fund launched on 05/01/2006.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Pharma is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $685.89 million, making it one of the larger ETFs attempting to match the performance of the Healthcare - Pharma segment of the equity market. IHE seeks to match the performance of the Dow Jones U.S. Select Pharmaceuticals Index before fees and expenses.
The Dow Jones U.S. Select Pharmaceuticals Index is free-float adjusted market capitalization-weighted index. It includes pharmaceutical companies such as manufacturers of prescription or over-the-counter drugs or vaccines, but excludes producers of vitamins.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.52%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Eli Lilly (LLY - Free Report) accounts for about 22.42% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Royalty Pharma Plc Class A (RPRX - Free Report) .
The top 10 holdings account for about 78.51% of total assets under management.
Performance and Risk
The ETF return is roughly 8.15% and was up about 12.77% so far this year and in the past one year (as of 06/18/2024), respectively. IHE has traded between $55.54 and $69.55 during this last 52-week period.
The ETF has a beta of 0.67 and standard deviation of 14.88% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Pharmaceuticals ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IHE is a good option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco Pharmaceuticals ETF (PJP - Free Report) tracks Dynamic Pharmaceutical Intellidex Index and the VanEck Pharmaceutical ETF (PPH - Free Report) tracks MVIS US Listed Pharmaceutical 25 Index. Invesco Pharmaceuticals ETF has $272.07 million in assets, VanEck Pharmaceutical ETF has $608.69 million. PJP has an expense ratio of 0.57% and PPH charges 0.36%.
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.
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Should You Invest in the iShares U.S. Pharmaceuticals ETF (IHE)?
Looking for broad exposure to the Healthcare - Pharma segment of the equity market? You should consider the iShares U.S. Pharmaceuticals ETF (IHE - Free Report) , a passively managed exchange traded fund launched on 05/01/2006.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Pharma is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $685.89 million, making it one of the larger ETFs attempting to match the performance of the Healthcare - Pharma segment of the equity market. IHE seeks to match the performance of the Dow Jones U.S. Select Pharmaceuticals Index before fees and expenses.
The Dow Jones U.S. Select Pharmaceuticals Index is free-float adjusted market capitalization-weighted index. It includes pharmaceutical companies such as manufacturers of prescription or over-the-counter drugs or vaccines, but excludes producers of vitamins.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.52%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Eli Lilly (LLY - Free Report) accounts for about 22.42% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Royalty Pharma Plc Class A (RPRX - Free Report) .
The top 10 holdings account for about 78.51% of total assets under management.
Performance and Risk
The ETF return is roughly 8.15% and was up about 12.77% so far this year and in the past one year (as of 06/18/2024), respectively. IHE has traded between $55.54 and $69.55 during this last 52-week period.
The ETF has a beta of 0.67 and standard deviation of 14.88% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Pharmaceuticals ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IHE is a good option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco Pharmaceuticals ETF (PJP - Free Report) tracks Dynamic Pharmaceutical Intellidex Index and the VanEck Pharmaceutical ETF (PPH - Free Report) tracks MVIS US Listed Pharmaceutical 25 Index. Invesco Pharmaceuticals ETF has $272.07 million in assets, VanEck Pharmaceutical ETF has $608.69 million. PJP has an expense ratio of 0.57% and PPH charges 0.36%.
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.