Better Pharmaceuticals ETF: VanEck's PPH vs. Invesco PJP
Key Points
The VanEck Pharmaceutical ETF offers a lower expense ratio of 0.36% compared to 0.58% for the Invesco Pharmaceuticals ETF.
The Invesco Pharmaceuticals ETF has delivered a higher 1-year total return of 41% relative to 31% for the VanEck fund.
The VanEck Pharmaceutical ETF provides a trailing-12-month dividend yield of 2%, which is more than double the 0.9% yield from the Invesco Pharmaceuticals ETF.
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The VanEck Pharmaceutical ETF (NASDAQ:PPH) provides a lower-cost entry and higher yield than the Invesco Pharmaceuticals ETF (NYSEMKT:PJP), which has shown stronger 1-year returns and more concentrated top holdings.
These ETFs target the pharmaceutical industry but take different paths. While they both focus on the research and distribution of drugs, their portfolios and cost structures vary significantly. This comparison examines how they stack up on costs, historical risk, and portfolio concentration as of Sept. 29, 2026, to help determine which strategy aligns with an investor's goals.
Snapshot (cost & size)
| Metric | PJP | PPH |
|---|---|---|
| Issuer | Invesco | VanEck |
| Share price | $127.11 (as of 2026-09-28) | $111.48 (as of 2026-09-28) |
| Expense ratio | 0.58% | 0.36% |
| 1-yr return (as of 2026-09-28) | 41.0% | 31.0% |
| Dividend yield | 0.9% | 2.0% |
| Beta | 0.43 | 0.45 |
| AUM | $569.6 million | $1.0 billion |
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.
The VanEck Pharmaceutical ETF is the more affordable fund with its 0.36% expense ratio, while the Invesco Pharmaceuticals ETF charges 0.58%. Investors also see a higher payout from the VanEck fund, which maintains a 1.06 percentage point lead in dividend yield.
Performance & risk comparison
| Metric | PJP | PPH |
|---|---|---|
| Max drawdown (5 yr) | (17.5%) | (20.3%) |
| Growth of $1,000 over 5 years (total return) | $1,722 | $1,677 |
What's inside
The VanEck Pharmaceutical ETF allocates its assets across 26 holdings, focusing on large-scale pharmaceutical enterprises with a significant concentration in its largest positions. Its biggest positions include Eli Lilly & Co (NYSE:LLY) at 20.82%, Merck & Co Inc (NYSE:MRK) at 13.36%, and Novo Nordisk A/S (NYSE:NVO) at 5.62%. It launched in 2011, and has paid $2.17 per share over the trailing 12 months, which on its recent ~$111.48 share price works out to a 2% yield.
The Invesco Pharmaceuticals ETF tracks 30 U.S. pharmaceutical companies involved in drug development and manufacturing using a more balanced weighting approach. Its largest positions include Gilead Sciences Inc (NASDAQ:GILD) at 5.58%, Pfizer Inc (NYSE:PFE) at 5.48%, and AbbVie Inc (NYSE:ABBV) at 5.46%. It launched in 2005, and has paid $1.13 per share over the trailing 12 months, which on its recent ~$127.11 share price works out to a 0.9% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
Pharmaceutical stocks offer investors a combination of recession-resistant demand, strong growth catalysts from medical innovation, and reliable dividend income from established global giants. Two well-established ETFs targeting the sector are the VanEck Pharmaceutical ETF (PPH) and the Invesco Pharmaceuticals ETF (PJP). Choosing between them comes down to some key differences.
PPH boasts the far larger AUM, delivering superior liquidity, and making it the better fund for active traders. It offers global exposure to the pharmaceutical industry, with 63.7% of the portfolio concentrated in the U.S. and the remainder in international companies. It also offers a greater dividend yield, making it an attractive choice for income-oriented investors. This, combined with its lower fees, makes it a good ETF to buy and hold for the long term.
PJP focuses strictly on the U.S. pharma market, so if you prefer to stick with U.S. stocks, this is the fund for you. Its holdings have been evaluated based on a variety of investment criteria, such as price and earnings momentum, quality, and value. This has helped PJP deliver stronger returns, although the trade-off is a higher expense ratio and lower dividend yield.
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Robert Izquierdo has positions in Pfizer. The Motley Fool has positions in and recommends AbbVie, Eli Lilly, Gilead Sciences, Merck, Novo Nordisk, and Pfizer. The Motley Fool has a disclosure policy.
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