Aug 29 2017

3 Pharma ETFs Beating the Market – February 27, 2014 #pharma #compliance

#big pharma etf


You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

3 Pharma ETFs Beating the Market

by Zacks Equity Research Published on February 27, 2014 |

After the incredible surge in 2013, the healthcare sector is no doubt crushing the overall market this year too. This is largely thanks to the bullish trend in both the pharma and biotech segments and robust performances by major drug companies (read: 3 Top Ranked Healthcare ETFs in Focus ).

Total fourth quarter earnings for the medical sector reported so far are up 1% with a beat ratio of 74.5% while revenues are up 6% with a beat ratio of 72.3%. Though biotech stocks continued their strong performances, pharma stocks have shown a strong turnaround from the recent patent cliffs and became the darlings of the financial market of late.

Increasing merger and acquisition activities, promising new drugs and their approval, restructuring, increased pipeline visibility, aging population and expansion into emerging markets are boosting confidence in the pharma sector.

In addition, the Affordable Care Act (often known as Obamacare) which ensures a larger base of insured persons across the U.S. is fueling growth. With expanded healthcare coverage, this corner of the healthcare space will likely be a huge beneficiary, boosting sales for many drug companies, as drugs would be accessible to a large number of Americans (read: Obamacare Will Be Amazing for These Stocks and ETFs ).

Further, the bullish trend for the sector is confirmed by the Zacks Industry Rank. as pharma has one of the best ranks for any industry at the time of writing. Three out of four Zacks industries that are classified under pharma have Zacks Ranks in the top 37%, suggesting solid trading for this segment in the coming months.

Moreover, the sector might be a good defensive play in order to withstand the current volatility in the market arising from the Fed s unwinding monetary stimulus and the recent sluggish U.S. economic data.

Top Pharma ETFs to Consider

Given this favorable position of the pharma industry, investors may want to consider some of the ETFs tracking this space for exposure. While there a number of quality choices in the space, we have highlighted some of our favorite top performing pharma ETFs below, any of which could make for excellent investments in today s growth-focused market (see: all the Healthcare ETFs here ):

The fund tracks the S P Pharmaceuticals Select Industry Index, holding 33 securities in its basket. The product has $913.3 million in AUM and trades more than 110,000 shares in volume a day, while its cost is just 35 basis points a year.

The product is pretty well spread across each security as the top 10 holdings account for nearly 43% of the total assets. Forest Laboratories (FRX ), Jazz Pharmaceuticals (JAZZ ) and Questcor Pharmaceuticals (QCOR ) occupy the top three positions in the basket with a combined 14.58% share. While large caps account for 44% of total assets, small and mid caps take the remainder.

The product gained about 13% so far in the year and has a Zacks ETF Rank of 2 or Buy rating with Low risk outlook.

This ETF tracks the Dow Jones U.S. Select Pharmaceuticals Index and holds 36 securities in its basket. The product has amassed $659 million in its asset base while volume is relatively light at less than 24,000 shares a day on average. The fund charges 45 bps in fees per year from its investors (read: A Comprehensive Guide to Pharma ETFs ).

In terms of individual holdings, the top three holdings Johnson Johnson (JNJ ), Pfizer (PFE ) and Merck (MRK ) together make up for 29.64% share in the basket, suggesting heavy concentration. IHE is a large cap-centric fund accounting for 68% of the assets. Though pharmaceuticals make up for a substantial 93% share, biotech receives a minor allocation.

The ETF gained nearly 11.30% year-to-date and has a decent Zacks ETF Rank of 3 or Hold rating with Low risk outlook.

This is by far the most popular choice in the pharma corner of the healthcare segment that follows the Dynamic Pharmaceuticals Intellidex Index. The product has a good level of AUM of about $1.2 billion and sees solid volume of roughly 216,000 shares a day. The fund charges 63 bps in fees and expenses from investors.

With holdings of 29 stocks, the fund is moderately concentrated in the top 10 holdings and focuses more on large caps with 62% of total assets. Biogen (BIIB ), Merck and Gilead Sciences (GILD ) are the top three components in the basket, accounting for nearly 5% share each. In terms of industrial exposure, 68% of assets are allocated to pharmaceuticals while 27% and 5% are allotted to biotechnology and medical equipment, respectively.

The product added nearly 11% so far this year. PJP has a Zacks ETF Rank of 3 or Hold rating with Low risk outlook.

These products are clearly outpacing the broad market fund (SPY ) and the broad sector fund (XLV ) by wide margins (read: 3 Sector ETFs Surging to Start 2014 ). This trend is likely to continue in the coming months given the recent market volatility and the promises made by Obamacare, solid industry rank, and M A opportunities in this corner of the investing world.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

In-Depth Zacks Research for the Tickers Above

Zacks News for ( XPH, PJP, IHE )

ETFs in Focus on Pfizer’s Medivation Acquisition

Pharma ETFs Soaring on Solid Q2 Earnings

Best Sector ETFs for Q3

ETFs to Watch If Hillary Clinton Wins the Presidency

ETFs to Gain or Lose if Trump Wins Presidential Election

Others News for ( XPH, PJP, IHE )

Digging around to Find Drivers in Danaher s Environmental Segment

Pall Acquisition Gave Birth to Danaher s Filtration Business

Acquiring Pall Corp. Still Breathing Life into Danaher

How Are Eli Lilly s Business Segments Performing?

Why Pfizer s Vaccines Business Is Declining

Zacks Releases 7 Best Stocks for September, 2016

Zacks #1 Rank Top Movers for Sep 4, 2016 Zacks #1 Rank Top Movers Zacks #1 Rank Top Movers for 09/04/16

Quick Links


My Account


Client Support

Follow Us

Zacks Research is Reported On:

Zacks Investment Research is an A+ Rated BBB Accredited Business.

Copyright 2016 Zacks Investment Research

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has nearly tripled the S P 500 with an average gain of +26% per year. These returns cover a period from 1988-2015 and were examined and attested by Baker Tilly Virchow Krause, LLP, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.

Visit to get our data and content for your mobile app or website.

Real time prices by BATS. Delayed quotes by Sungard.

NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.

Written by admin

Leave a Reply

Your email address will not be published. Required fields are marked *