Top Pharma ETF Selections: A 2025 Guide to Healthcare Sector Funds

The pharmaceutical industry continues to demonstrate substantial growth potential, with projections indicating the global pharma market could exceed US$1.75 trillion by decade’s end, according to Evaluate Pharma. For investors seeking diversified access to this expanding sector without purchasing individual pharmaceutical stocks, pharmaceutical exchange-traded funds present a compelling option. These fund vehicles offer sector-wide exposure while maintaining the flexibility of stock-like trading, alongside the added benefits of reduced volatility, lower expense ratios, and portfolio diversification across therapeutic areas including oncology, vaccines, pain management, and biotechnology.

Evaluating the Leading Pharma ETF Options

Investors navigating the pharmaceutical fund landscape have several established choices. Based on current assets under management as of November 2025, here are five significant pharma-focused ETFs worth considering:

VanEck Pharmaceutical ETF (NASDAQ:PPH) - The Sector Leader

With US$1.15 billion in total assets under management, this fund represents the largest pharma-focused ETF in terms of AUM. Launched in late 2011, PPH tracks the MVIS US Listed Pharmaceutical 25 Index and maintains a focused portfolio of 26 holdings. The fund’s leading positions include industry giants like Eli Lilly (NYSE:LLY), Novartis (NYSE:NVS), Merck & Company (NYSE:MRK), Novo Nordisk (NYSE:NVO), and McKesson (NYSE:MCK). Analysts suggest this ETF may appeal to investors seeking tactical exposure to established pharma players.

iShares US Pharmaceuticals ETF (ARCA:IHE) - Broad US Coverage

Established in May 2006, this fund manages US$669.2 million and provides access to 45 major US pharmaceutical companies, primarily large-cap corporations. The portfolio is heavily weighted toward two positions—Johnson & Johnson (NYSE:JNJ) and Eli Lilly—which together comprise nearly half of the fund’s value. Additional substantial holdings include Merck, Royalty Pharma (NASDAQ:RPRX), and Viatris (NASDAQ:VTRS), offering investors concentrated exposure to market-leading names.

Invesco Pharmaceuticals ETF (ARCA:PJP) - Value-Focused Approach

Launched in June 2005, this fund operates with US$299.48 million in assets and tracks 31 carefully selected US-based pharmaceutical companies. The fund employs a stock-selection strategy emphasizing valuation metrics and risk assessment. Its largest holdings comprise Eli Lilly, Amgen (NASDAQ:AMGN), Johnson & Johnson, Merck, and AbbVie (NYSE:ABBV), positioning investors within the sector’s most established names.

State Street SPDR S&P Pharmaceuticals ETF (ARCA:XPH) - Equal-Weight Distribution

With US$189.93 million under management since June 2006, this fund stands out for its distinctive approach: it tracks 52 pharmaceutical holdings with relatively balanced weighting across positions. This structure differs from competitors that concentrate assets in top holdings. Leading positions include Jazz Pharmaceuticals (NASDAQ:JAZZ), Tarsus Pharmaceuticals (NASDAQ:TARS), Eli Lilly, Ligand Pharmaceuticals (NASDAQ:LGND), and Crinetics Pharmaceuticals (NASDAQ:CRNX).

KraneShares MSCI All China Health Care Index ETF (ARCA:KURE) - Geographic Diversification

For investors seeking international exposure, this fund offers a distinct alternative. Established in February 2018 with US$95.29 million in assets, KURE provides access to large- and mid-cap healthcare companies within China’s market, weighted by market capitalization. The fund tracks 50 holdings including BeOne Medicines (NASDAQ:ONC), Jiangsu Hengrui Medicine (SHA:600276), Innovent Biologics (HKEX:1801), WuXi Biologics (HKEX:2269), and Sino Biopharmaceutical (HKEX:1177), offering investors a window into the Chinese healthcare sector.

Selecting the Right Pharma ETF for Your Portfolio

Each pharmaceutical exchange-traded fund presents distinct characteristics regarding portfolio construction, geographic focus, and concentration levels. Investors should evaluate their risk tolerance, desired exposure duration, and preference for domestic versus international healthcare assets when comparing these pharma ETF options. The variety of choices enables tailored portfolio allocation strategies within the pharmaceutical sector.