ETF Spotlight: Pharmaceuticals | ETF Trends

ETF spotlight on SPDR S&P Pharmaceuticals ETF (NYSEArca: XPH), part of an ongoing series.

Assets: $241.21 million.

Objective: The SPDR S&P Pharmaceuticals ETF tries to reflect the performance of the S&P Pharmaceuticals Select Industry Index, which tracks U.S-listed companies engaged in the pharmaceuticals industry.

Holdings: Top holdings include: Salix Pharma Inc (NasdaqGS: SLXP) 4.57%, Bristol Myers Squibb Co. (NYSE: BMY) 4.43%, Questcor Pharma Inc (NasdaqGS: QCOR) 4.31%, Perrigo Co (NasdaqGS: PRGO) 4.24% and Warner Chilcott Plc (NasdaqGS: WCRX) 4.19%.

What You Should Know:

  • State Street Global Advisors sponsors the ETF.
  • XPH has an expense ratio of 0.35%.
  • The fund is up 4.36% over the past month, down 5.54% over the last three months and up 5.37% year-to-date.
  • “Given the health-care sector’s lack of sensitivity to the overall economic climate, investors may consider this fund as a defensive tilt for a portfolio, particularly with the recent uncertainty over health-care reform likely settled for the immediate future,” Morningstar analyst Robert Goldsborough said. [Healthcare ETFs Live Up to Defensive Reputation]
  • The ETF does not hold exposure to services and medical-devices firms found in broader health-care funds.
  • “We believe that there are two main themes for investors to consider before investing in health care: recently approved health-care reform and the mega-merger activity among the pharmaceuticals,” Goldsborough added.

The Latest News:

  • Onyx Pharmaceutical (NasdaqGS: ONXX) shares have jumped this week after the company reached an agreement on its main product, the cancer drug Nexavar, with Bayer AG that would protect the company’s rights if it is bought out, WSJ.com reports.
  • The new deal states that Onyx would keep a 50-50 profit-sharing agreement, along with co-development and co-promotion rights.
  • Onyx is among a number of attractive midsized biotech companies that larger firms are looking at in an attempt to diversify product lines as patents on large blockbuster drugs expire.

SPDR S&P Pharmaceuticals ETF

For past stories in this series, visit our ETF Spotlight category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.