IYH vs PJP: Diversified, Lower‑Cost Healthcare Fund Faces Concentrated Pharma Challenger

Overview

• IYH is the cheaper, broader option with a 0.38% expense ratio, roughly 100 U.S. healthcare holdings, a launch date in 2000, and top weights that include Eli Lilly (16.1%), Johnson & Johnson (10.3%) and AbbVie (7.5%).
• PJP is a more concentrated pharmaceuticals ETF with a 0.57% expense ratio, 29 stocks, a 2005 launch date, and much smaller individual weights for the same big drugmakers (AbbVie 5.6%, Eli Lilly 5.4%, Johnson & Johnson 5.3%).
• PJP’s recent outperformance reflects drugmakers leading the sector, showing how concentrated funds can noticeably outpace broad ETFs when a single segment is in favor.
• The tradeoff is clear: IYH’s diversification and lower fees tend to smooth returns and offer a modestly higher yield, while PJP’s concentration raises volatility tied to company events such as FDA rulings, clinical trial results, and M&A.
• Investors should match fund choice to fee sensitivity, income needs and tolerance for single‑company risk and monitor liquidity, bid‑ask spreads and upcoming pharma catalysts that could swing concentrated holdings.