IHE offers a lower expense ratio and higher dividend yield than PJP, though both funds differ in portfolio concentration and risk exposure.
The iShares U.S. Pharmaceuticals ETF (IHE) undercuts the Invesco Pharmaceuticals ETF (PJP) on costs, charging a 0.38% expense ratio versus PJP’s 0.57%. IHE also delivers a 1.62% dividend yield, nearly double PJP’s 0.96%. Both funds target U.S. drugmakers but diverge in strategy and risk profile.
IHE, launched in 2006, holds 56 stocks but is heavily concentrated, with Eli Lilly (LLY) and Johnson & Johnson (JNJ) comprising 44% of its portfolio. PJP, by contrast, spreads its 29 holdings more evenly, though its top positions still carry significant weight. Performance and volatility metrics reflect these structural differences.
Investors weighing the two must balance IHE’s cost efficiency and yield against PJP’s broader diversification. Sector swings, driven by clinical trials or FDA decisions, can amplify risks for either fund.