iShares U.S. Pharmaceuticals ETF Tops Simplify Health Care ETF Returns
Written by Brendan Coffey for The Motley Fool -> iShares U.S. Pharmaceuticals ETF provides more cost-efficient access to the healthcare sector with a lower expense ratio and a higher dividend yield Simplify Health Care ETF employs an active management strategy focused on innova
iShares U.S. Pharmaceuticals ETF provides more cost-efficient access to the healthcare sector with a lower expense ratio and a higher dividend yield
Simplify Health Care ETF employs an active management strategy focused on innovation and donates its net profits to breast cancer research
iShares U.S. Pharmaceuticals ETF has delivered higher total returns over the past year while maintaining lower price volatility than its peer
Plenty of funds provide exposure to the healthcare landscape, but often each one does so at via a very different path. The iShares U.S. Pharmaceuticals ETF (NYSEMKT:IHE) offers low-cost, targeted exposure to domestic drugmakers, while Simplify Health Care ETF (NYSEMKT:PINK) provides an actively managed, pro-bono strategy with broader healthcare sub-sector reach.
While the iShares fund relies on a passive index of established pharmaceutical giants, the Simplify fund utilizes an active manager to identify growth opportunities across the healthcare spectrum. This comparison explores how these differing methodologies impact cost, performance, and portfolio composition.
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares U.S. Pharmaceuticals ETF is the more affordable option, carrying an expense ratio of 0.38% compared to the 0.51% charged by the Simplify Health Care ETF. Investors seeking income may prefer the iShares fund, which currently offers a higher dividend yield.
Simplify Health Care ETF focuses on long-term capital appreciation by investing in 58 innovative healthcare companies across a range of market capitalizations. Its portfolio is composed of about 90% healthcare and 10% industrials, with its largest positions including Purecycle Technologies (NASDAQ:PCT) at 10.26%, United Therapeutics Corp (NASDAQ:UTHR) at 7.32%, and Novo Nordisk (NYSE:NVO) at 6.67%. Launched in 2021, the fund has paid $0.16 per share over the previous 12 months and utilizes a currency hedge. A unique feature of this actively managed fund is its pro bono mission, “Shares for the Cure,” which pledges all net profits for annual donations to the Susan G. Komen Foundation.
