Can GLP-1s Fatten Your Portfolio? We Examine the VanEck Pharmaceutical ETF vs State Street SPDR Pharmaceuticals ETF
The VanEck Pharmaceutical ETF(NASDAQ:PPH) and the State Street SPDR S&P Pharmaceuticals ETF(NYSEMKT:XPH) differ significantly in concentration, with the VanEck fund focusing on global blue-chips and the SPDR fund offering broader U.S. exposure.
Investors looking for exposure to the pharmaceutical industry have several options, but the choice often comes down to the degree of concentration. While both funds capture the core of the drug markets, their strategies regarding market-cap and individual-stock weighting lead to different risk-return profiles for shareholders.
Snapshot (cost & size)
| Metric |
XPH |
PPH |
|---|---|---|
| Issuer |
SPDR |
VanEck |
| Share price |
$62.70 (as of 2026-10-23) |
$114.93 (as of 2026-10-23) |
| Expense ratio |
0.35% |
0.36% |
| 1-yr return (as of 2026-10-23) |
29.7% |
26.8% |
| Dividend yield |
0.4% |
1.9% |
| Beta |
0.63 |
0.44 |
| AUM |
$450.4 million |
$1.1 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on Oct. 23, 2026.
The VanEck Pharmaceutical ETF is slightly more expensive, with a 0.36% expense ratio compared to 0.35% for the SPDR fund. However, the VanEck fund provides a significantly higher payout for income-seeking investors through its distribution yield.
Performance & risk comparison
| Metric |
XPH |
PPH |
|---|---|---|
| Max drawdown (5 yr) |
(30.9%) |
(20.3%) |
| Growth of $1,000 over 5 years (total return) |
$1,391 |
$1,698 |
What's inside
The VanEck Pharmaceutical ETF concentrates its assets into 26 holdings, creating a high-conviction portfolio that is 100% invested in the healthcare sector. Its largest positions include Eli Lilly & Co(NYSE:LLY) at 20.99%, Merck & Co Inc(NYSE:MRK) at 12.5%, and Novo Nordisk A/S(NYSE:NVO) at 5.6%. This strategy results in a heavy tilt toward mega-cap pharmaceutical giants. That's by design: launched in 2011, it tracks an index of the 25 largest pharmaceutical companies. VanEck Pharmaceutical ETF has paid $2.14 per share over the trailing 12 months, which, on its recent ~$114.93 share price, works out to a 1.9% yield.
The State Street SPDR S&P Pharmaceuticals ETF maintains a broader scope, with 62 holdings, and provides 100% healthcare sector exposure, but with more room for mid-cap names. Its largest positions are Xeris Biopharma Holdings Inc.(NASDAQ:XERS) at 2.5%, Veradermics Inc.(NYSE:MANE) at 2.4%, and Amneal Pharmaceuticals Inc.(NASDAQ:AMRX) at 2.3%. This sampling approach offers more diversified sub-sector coverage than its peer. Launched in 2006, it tracks the S&P Pharmaceuticals Select Industry Index. State Street SPDR S&P Pharmaceuticals ETF has paid $0.27 per share over the trailing 12 months, which, on its recent ~$62.70 share price, works out to a 0.4% yield.
For more guidance on ETF investing, check out the full guide at this link .
Which looks like the better buy?
Pharmaceutical ETFs can be very beneficial to a portfolio. They contain a lot of the defensive characteristics of healthcare stocks in general, while providing exposure to the explosive growth prospects of companies getting new drug approvals or capitalizing on macro treatment trends, like the wave of GLP-1 weight-loss drugs sweeping the industry.
These two ETFs may seek to profit on that same ground, but they take different approaches investors should be aware of.
The VanEck ETF PPH is a highly concentrated fund, meaning its portfolio is heavily reliant on its top 10 holdings. Its top 10 holdings are nearly 72% of its portfolio. As noted earlier, its assets are mostly in large caps, with 89% of assets in large caps and about half of that value in style stocks. The balance is 8% mid-caps and 3% small-caps. Interestingly, the concentrated portfolio does offer international exposure, with about 32% of the portfolio in non-U.S. developed-nation stocks, like Tel Aviv, Israel-headquartered Teva Pharmaceutical Industries Ltd.(NYSE:TEVA).
By comparison, the State Street SPDR Pharmaceutical ETF, XPH, is in some ways a more diverse drugmaker ETF than the VanEck. Only about a quarter of XPH's portfolio is allocated to its top 10 holdings, and the portfolio mix overall is on the other side of the style spectrum, with 81% in small-cap stocks, roughly evenly divided between value and growth, along with equities considered a mix of the two. Interestingly, XPH offers no international holdings, with the full portfolio holding only U.S. listed stocks.
Unless you have a strong preference for holding a large-cap or small-cap-centric ETF, the main differentiator should be performance.
In that view, these two ETFs can present a dilemma. XPH has been a sterling performer compared to its VanEck rival in the past 52-week and three-year periods, returning 29.7% and an annualized 19.2%, respectively. Over the past five and ten years, XPH has rewarded investors with annualized profits of 7.9% and 4.5%.
PPH beats XPH in those longer time frames. The VanEck fund has returned 10.7% and 8.7% annualized over the 5-year and 10-year periods, respectively. In the 1-year and 3-year periods, it lags its rival, returning 23.6% and 13.3%.
Presuming you're buying a pharma ETF as a long-term investment, the better track record over the long haul for PPH makes it the choice to add to your portfolio.
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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly, Merck, and Novo Nordisk. The Motley Fool has a disclosure policy .
Can GLP-1s Fatten Your Portfolio? We Examine the VanEck Pharmaceutical ETF vs State Street SPDR Pharmaceuticals ETF was originally published by The Motley Fool
