Which Healthcare ETF Is the Better Buy: VanEck’s Pharma Fund PPH or iShares’ Biotech Fund IBB?
One fund owns the big drugmakers that pay dividends. The other owns the broader biotech field, where stocks swing more. Here is which fits long-term investors.
Investors are debating between VanEck Pharmaceutical ETF (PPH +1.11%) and iShares Biotechnology ETF (IBB -0.44%) when considering targeted exposure to the healthcare industry. While both offer specific investments, they exhibit distinct risk-reward profiles. The VanEck fund focuses on a concentrated portfolio of 26 large, dividend-paying drugmakers, whereas the iShares fund provides broader diversification across 243 holdings, including 87% in biotechnology and 10% in life sciences.
PPH's largest positions include Eli Lilly (LLY +1.26%), Merck & Co (MRK +0.55%), and Novo Nordisk (NVO +2.41%). In contrast, IBB's leading companies are Gilead Sciences (GILD +0.08%), Amgen (AMGN -0.30%), and Vertex Pharmaceuticals (VRTX -0.74%). VanEck has a lower expense ratio (0.36%) and delivers a higher dividend yield (1.8%) compared to iShares' (0.2%).
PPH's steadier performance over five years is also notable, with a smaller worst drop than IBB's. Investors may find PPH more appealing due to its broader, more stable exposure to the healthcare sector and higher dividend payouts.
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