Which Pharmaceutical ETF Is the Better Buy: iShares’ Domestic IHE or VanEck’s Global PPH?
2026-10-26 15:40
•Sara Appino •The Motley Fool
•••• •••••• Axe Cap view
IHE vs PPH: Local Angle on Pharma ETFs
iShares’ IHE leads on returns, but VanEck’s PPH offers dividend and global pharma ballast.
South African investors often overlook the pharma sector when chasing growth or income. IHE’s 38% return over the past year is tempting, largely thanks to Eli Lilly and its GLP-1 drug success. That’s momentum you can’t argue with. But PPH offers diversification, spreading risk across European giants and paying nearly double the yield at 1.9%. For someone holding rand and watching the USD/ZAR at 18+, the higher dividend from PPH adds a cushion if the rand weakens further. That said, IHE’s concentrated bet could backfire if GLP-1 hype fades or regulatory hurdles appear. Also, PPH’s lower volatility might suit more cautious profiles. If you want growth potential linked to innovation, IHE edges out, but income seekers should watch PPH. Given the rand’s recent softness, the FX translation can amplify returns or pain. this is just our opinion and not financial advice
Buy IHE on momentum but trim cautiously if valuations look stretched; consider PPH for diversification and dividends, especially as a rand hedge.
- IHE
- PPH
- USD/ZAR
- Regulatory risk on GLP-1 drugs hitting IHE
- Rand volatility impacting PPH returns
6/10
The iShares U.S. Pharmaceuticals ETF (IHE) has outperformed VanEck Pharmaceutical ETF (PPH) over the past year, driven by concentrated exposure to Eli Lilly's GLP-1 drugs, delivering 38.2% returns versus PPH's 26.4%. However, PPH offers global diversification with European pharma giants, a higher dividend yield of 1.9%, and nearly identical expense ratios. IHE suits investors seeking recent momentum, while PPH appeals to those prioritizing international exposure and income.
Our take is based on reporting first published by The Motley Fool.