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iShares U.S. Pharmaceuticals ETF outperforms despite drug pricing policy risks, up 38% in 12 months.

Market News
19 May 2026
24/7 Wall Street
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Bullish
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The iShares U.S. Pharmaceuticals ETF (IHE) has gained 38% over the past year despite threats from U.S. drug pricing policies like the 'most favored nation' order. The ETF benefits from dividends and strong drug pipelines, especially from major holdings like Eli Lilly and Johnson & Johnson, though it carries concentration risk with two stocks making up 42% of assets. While broader healthcare ETFs lagged, IHE's recent outperformance is driven by GLP-1 drug successes and undervalued pharma multiples. Investors near retirement may consider adding some exposure, but should be aware of policy uncertainties and the fund's narrow focus.

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