While PJP is home some of the largest and most familiar biotech and pharma stocks, including Dow components Johnson & Johnson (NYSE: JNJ) and Pfizer (NYSE: PFE) along with Amgen (NasdaqGS: AMGN), Gilead Sciences (NasdaqGS: GILD) and Celgene (NasdaqGS: CELG), the ETF also allocates almost 29% of its weight to small-cap stocks, putting it in position to benefit from increasing mergers and acquisitions activity in the health care sector. [Index Changes Benefit PowerShares ETFs]
PJP has already benefited from pharma M&A this year, having held a stake in drugmaker Forest Laboratories (NYSE: FRX) at the time Actavis (NYSE: ACT), currently a member of the ETF’s lineup, acquire the firm. PJP also allocates nearly 3% to Salix Pharmaceuticals (NasdaqGS: SLXP), company widely rumored to be takeover candidate. [Forest Deal A Boon for Pharma ETFs]
“PJP offers a “smart” index strategy for passive investors who don’t want to analyze which of the other three funds are best positioned to outperform in the next year. However, given its track record, which of course does not guarantee future results, PJP also makes a strong argument that it is the best of the group for long-term investors,” adds Sauer.
Investors like what PJP has to say. The ETF has added nearly $119 million of its $1.2 billion in assets under management this year.
PowerShares Dynamic Pharmaceuticals Portfolio
