Pharmaceutical Industry ETF

DEFINITION of 'Pharmaceutical Industry ETF'

A sector-following fund that invests in developers and manufacturers of pharmaceuticals, with the objective of matching the investment performance of an underlying pharmaceutical index. Since it invests largely in drug companies, a pharmaceutical ETF has a narrower focus than a broad healthcare ETF.

BREAKING DOWN 'Pharmaceutical Industry ETF'

While an ETF may hold stocks either in proportion to their weight in an underlying index or in equal weights, this distinction is especially critical for a pharmaceutical ETF. By giving smaller companies the same percentage weighting as large companies, an equal-weighted pharmaceutical ETF may tend to outperform an ETF that is heavily concentrated in the mega-cap companies.

RELATED TERMS
  1. ETF Of ETFs

    An exchange-traded fund (ETF) that tracks other ETFs rather than ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Semiconductor Industry ETF

    A sector-following fund that invests in developers, manufacturers ...
  4. Inverse ETF

    An exchange-traded fund (ETF) that is constructed by using various ...
  5. Intelligent ETF

    An exchange-traded fund (ETF) that employs an active investment ...
  6. Index ETF

    Exchange-traded funds that follow a specific benchmark index ...
Related Articles
  1. ETFs & Mutual Funds

    PJP: PowerShares Dynamic Pharmaceuticals ETF

    Learn about the PowerShares Dynamic Pharmaceuticals exchange-traded fund, which specializes on investing in pharmaceutical companies.
  2. ETFs & Mutual Funds

    Four Key Pharmaceuticals ETFs To Consider

    ETF funds are now very liquid investments and are suitable to investors who seek to match the price performance of the indexes without the cost of owning shares. PJP is the most liquid ETF, followed ...
  3. ETFs & Mutual Funds

    4 Ways to Evaluate ETFs Before Buying

    Learn four areas in which to evaluate an ETF investment to be sure that the investor has a clear understanding of the security being purchased.
  4. ETFs & Mutual Funds

    The Best Way Into Big Pharma? See This ETF (IHE)

    Pharma investing isn't for everyone, but sector-specific ETFs, such as the iShares Dow Jones U.S. Pharmaceuticals ETF (IHE), are changing the game.
  5. ETFs & Mutual Funds

    FPHAX: Mutual Fund to Invest in Pharmaceuticals by Fidelity

    Learn about the pharmaceutical industry, including the two main threats it faces in 2016 and an analysis of the Fidelity Select Pharmaceutical Portfolio.
  6. ETFs & Mutual Funds

    4 Things to Know Before Choosing an ETF

    ETFs are a low-cost way to get exposure to different markets. But they're not all the same. Investors should research the following key information regarding the ETF before buying it.
  7. ETFs & Mutual Funds

    How To Pick The Best ETF

    Of the hundreds of exchange-traded funds on the market, some are bound to fail. Learn how to pick the best of the bunch.
  8. Financial Advisor

    What Your Clients Must Know About ETFs

    Like any investment, ETFs come with some fine print. Here is what advisors should reveal to their clients about these hugely popular products.
  9. Investing

    A Look At the Growth Of the ETF Industry

    Explore the phenomenal growth rate of the ETF industry, and learn some of the principal reasons why ETFs are projected to continue to grow at a rapid pace.
  10. ETFs & Mutual Funds

    Building An All-ETF Portfolio

    Balance is the key when selecting an all-ETF portfolio that will hedge against market volatility.
RELATED FAQS
  1. Are there ETFs that track the drugs sector?

    Find out whether pharmaceutical exchange traded funds (ETFs) are available for investment. Learn more about how ETFs track ... Read Answer >>
  2. Is there an ETF composed of other ETFs?

  3. What countries comprise the majority of the global drugs sector?

    Find out which countries are the largest producers of pharmaceutical products in the world and why the United States dominates ... Read Answer >>
  4. What are some popular mutual funds that give exposure to the drugs sector?

    Discover some of the most widely traded and top-rated mutual funds that investors can use to make profits from gains in the ... Read Answer >>
  5. What metrics are often used to evaluate companies in the drugs sector?

    Learn about some of the equity evaluation metrics that are most frequently used for examining companies in the pharmaceutical ... Read Answer >>
  6. What exactly is an ETF portfolio?

    Learn what exchange-traded funds (ETFs) are and their advantages to investors, what a portfolio of ETFs is, and discover ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center