Pharmaceutical Industry ETF

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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.

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    Pharmaceuticals Benefit from Advances in Biotechnology One of the sectors that benefits most strongly from advances in biotechnology ... Read Full Answer >>
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    There are several exchange traded funds (ETFs) that track the pharmaceutical sector. These are specialized funds that are ... Read Full Answer >>
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