The pharmaceutical industry is on a growth trajectory, with the global market projected to exceed US$1.75 trillion by 2030. For investors seeking exposure to this lucrative sector, pharmaceutical ETFs represent one of the smartest approaches compared to picking individual stocks. These funds offer diversified exposure to major pharma players while maintaining lower volatility and reduced expenses.
Why Choose Pharmaceutical ETFs Over Individual Stocks?
Pharmaceutical exchange-traded funds provide several distinct advantages. Instead of banking on a single drug developer or manufacturer, investors gain access to a basket of companies across multiple therapeutic areas—from oncology to vaccines to biotechnology. This diversification cushion means you’re not entirely dependent on one company’s clinical trial outcomes or regulatory setbacks.
Additionally, best pharma etf options trade like regular stocks during market hours, yet deliver the portfolio stability of mutual funds. Transaction costs are typically lower, and expense ratios remain competitive, making them ideal for both seasoned and beginner investors.
Top Pharmaceutical ETF Selections by Assets
1. VanEck Pharmaceutical ETF (NASDAQ:PPH)
Assets Under Management: US$1.15 billion
As the largest option in this space, the VanEck fund tracks the MVIS US Listed Pharmaceutical 25 Index since its 2011 launch. The ETF maintains 26 holdings concentrated in major names like Eli Lilly, Novartis, Merck & Company, Novo Nordisk, and McKesson. This structure is particularly suited for investors wanting tactical exposure without excessive risk concentration.
2. iShares US Pharmaceuticals ETF (ARCA:IHE)
Assets Under Management: US$669.2 million
With roots dating back to 2006, this fund has built a reputation by tracking prominent US-based pharmaceutical companies through 45 holdings. The portfolio leans heavily toward large-cap stocks, with Johnson & Johnson and Eli Lilly commanding nearly half of its weight. Other significant positions include Merck, Royalty Pharma, and Viatris.
3. Invesco Pharmaceuticals ETF (ARCA:PJP)
Assets Under Management: US$299.48 million
Launched in June 2005, the Invesco option concentrates on US pharmaceutical companies and employs a systematic selection process based on valuation metrics and risk assessment. Its 31 holdings include Eli Lilly, Amgen, Johnson & Johnson, Merck, and AbbVie—representing the cream of the American pharma industry.
4. State Street SPDR S&P Pharmaceuticals ETF (ARCA:XPH)
Assets Under Management: US$189.93 million
Operating since June 2006, this fund tracks the pharmaceutical segment of the S&P Total Market Index with 52 equally-weighted holdings. This balanced approach distinguishes it from competitors. Top positions include Jazz Pharmaceuticals, Tarsus Pharmaceuticals, Eli Lilly, Ligand Pharmaceuticals, and Crinetics Pharmaceuticals.
5. KraneShares MSCI All China Health Care Index ETF (ARCA:KURE)
Assets Under Management: US$95.29 million
For investors seeking international diversification, this 2018-launched fund provides exposure to Chinese healthcare through 50 large- and mid-cap stocks. Holdings feature BeOne Medicines, Jiangsu Hengrui Medicine, Innovent Biologics, WuXi Biologics, and Sino Biopharmaceutical—offering a window into Asia’s fast-growing pharmaceutical sector.
Final Thoughts
The pharmaceutical sector remains a compelling long-term investment theme. Whether you’re drawn to the best pharma etf for stability, growth, or geographical diversity, the options outlined here provide viable pathways into this dynamic industry without requiring stock-picking expertise.
Best Pharma ETF Options for Investors in 2025
The pharmaceutical industry is on a growth trajectory, with the global market projected to exceed US$1.75 trillion by 2030. For investors seeking exposure to this lucrative sector, pharmaceutical ETFs represent one of the smartest approaches compared to picking individual stocks. These funds offer diversified exposure to major pharma players while maintaining lower volatility and reduced expenses.
Why Choose Pharmaceutical ETFs Over Individual Stocks?
Pharmaceutical exchange-traded funds provide several distinct advantages. Instead of banking on a single drug developer or manufacturer, investors gain access to a basket of companies across multiple therapeutic areas—from oncology to vaccines to biotechnology. This diversification cushion means you’re not entirely dependent on one company’s clinical trial outcomes or regulatory setbacks.
Additionally, best pharma etf options trade like regular stocks during market hours, yet deliver the portfolio stability of mutual funds. Transaction costs are typically lower, and expense ratios remain competitive, making them ideal for both seasoned and beginner investors.
Top Pharmaceutical ETF Selections by Assets
1. VanEck Pharmaceutical ETF (NASDAQ:PPH)
Assets Under Management: US$1.15 billion
As the largest option in this space, the VanEck fund tracks the MVIS US Listed Pharmaceutical 25 Index since its 2011 launch. The ETF maintains 26 holdings concentrated in major names like Eli Lilly, Novartis, Merck & Company, Novo Nordisk, and McKesson. This structure is particularly suited for investors wanting tactical exposure without excessive risk concentration.
2. iShares US Pharmaceuticals ETF (ARCA:IHE)
Assets Under Management: US$669.2 million
With roots dating back to 2006, this fund has built a reputation by tracking prominent US-based pharmaceutical companies through 45 holdings. The portfolio leans heavily toward large-cap stocks, with Johnson & Johnson and Eli Lilly commanding nearly half of its weight. Other significant positions include Merck, Royalty Pharma, and Viatris.
3. Invesco Pharmaceuticals ETF (ARCA:PJP)
Assets Under Management: US$299.48 million
Launched in June 2005, the Invesco option concentrates on US pharmaceutical companies and employs a systematic selection process based on valuation metrics and risk assessment. Its 31 holdings include Eli Lilly, Amgen, Johnson & Johnson, Merck, and AbbVie—representing the cream of the American pharma industry.
4. State Street SPDR S&P Pharmaceuticals ETF (ARCA:XPH)
Assets Under Management: US$189.93 million
Operating since June 2006, this fund tracks the pharmaceutical segment of the S&P Total Market Index with 52 equally-weighted holdings. This balanced approach distinguishes it from competitors. Top positions include Jazz Pharmaceuticals, Tarsus Pharmaceuticals, Eli Lilly, Ligand Pharmaceuticals, and Crinetics Pharmaceuticals.
5. KraneShares MSCI All China Health Care Index ETF (ARCA:KURE)
Assets Under Management: US$95.29 million
For investors seeking international diversification, this 2018-launched fund provides exposure to Chinese healthcare through 50 large- and mid-cap stocks. Holdings feature BeOne Medicines, Jiangsu Hengrui Medicine, Innovent Biologics, WuXi Biologics, and Sino Biopharmaceutical—offering a window into Asia’s fast-growing pharmaceutical sector.
Final Thoughts
The pharmaceutical sector remains a compelling long-term investment theme. Whether you’re drawn to the best pharma etf for stability, growth, or geographical diversity, the options outlined here provide viable pathways into this dynamic industry without requiring stock-picking expertise.