Launched on 06/23/2005, the Invesco Pharmaceuticals ETF (PJP) is a smart beta exchange traded fund offering broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
PJP is managed by Invesco, and this fund has amassed over $438.98 million, which makes it one of the average sized ETFs in the Health Care ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Pharmaceutical Intellidex Index.
The Dynamic Pharmaceutical Intellidex Index is comprised of stocks of U.S. pharmaceutical companies. It is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for PJP are 0.57%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.88%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Healthcare sector.
When you look at individual holdings, Eli Lilly & Co (LLY) accounts for about 5.39% of the fund's total assets, followed by Abbvie Inc (ABBV) and Johnson & Johnson (JNJ).
The top 10 holdings account for about 47.99% of total assets under management.
Performance and Risk
The ETF has gained about 15.92% and is up roughly 43.89% so far this year and in the past one year (as of 07/28/2026), respectively. PJP has traded between $80.73 and $122.24 during this last 52-week period.
The ETF has a beta of 0.45 and standard deviation of 15.83% for the trailing three-year period, making it a high risk choice in the space. With about 33 holdings, it has more concentrated exposure than peers .
Alternatives
Invesco Pharmaceuticals ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
VanEck Pharmaceutical ETF (PPH) tracks MVIS US Listed Pharmaceutical 25 Index and the iShares U.S. Pharmaceuticals ETF (IHE) tracks Dow Jones U.S. Select Pharmaceuticals Index. VanEck Pharmaceutical ETF has $969.07 million in assets, iShares U.S. Pharmaceuticals ETF has $1.49 billion. PPH has an expense ratio of 0.36% and IHE changes 0.38%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit
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