Should You Invest in the Invesco Pharmaceuticals ETF (PJP)?
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Pharma is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $257.58 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Pharma segment of the equity market. PJP seeks to match the performance of the Dynamic Pharmaceutical Intellidex Index before fees and expenses.
The Dynamic Pharmaceutical Intellidex Index is comprised of stocks of U.S. pharmaceutical companies. It is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.07%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.
Looking at individual holdings, Eli Lilly & Co (LLY) accounts for about 5.24% of total assets, followed by Pfizer Inc (PFE) and Amgen Inc (AMGN).
The top 10 holdings account for about 47.34% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Pharmaceuticals ETF has added roughly 9.35% so far, and was up about 6.41% over the last 12 months (as of 08/19/2025). PJP has traded between $74.593 and $90.012 in this past 52-week period.
The ETF has a beta of 0.48 and standard deviation of 15.82% for the trailing three-year period, making it a high risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Pharmaceuticals ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PJP is a sufficient option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
VanEck Pharmaceutical ETF (PPH) tracks MVIS US Listed Pharmaceutical 25 Index and the iShares U.S. Pharmaceuticals ETF (IHE) tracks Dow Jones U.S. Select Pharmaceuticals Index. VanEck Pharmaceutical ETF has $532.51 million in assets, iShares U.S. Pharmaceuticals ETF has $571.47 million. PPH has an expense ratio of 0.36%, and IHE charges 0.39%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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
Invesco Pharmaceuticals ETF (PJP): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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