Eli Lilly And Co (NYSE:LLY) has officially become the giant quietly moving the strings behind a large slice of the pharma ETF universe. With blockbuster revenue growth, repeated earnings beats and a pipeline that refuses to slow down, Lilly isn’t just lifting its own stock – it’s powering a growing cluster of healthcare ETFs that now allocate double-digit weight to the drugmaker.
Today, roughly 15 ETFs give Lilly a double-digit footprint – making the company one of the most influential single-stock drivers of healthcare fund performance. And with pharma stocks delivering strong third-quarter scorecards of the year, Lilly’s outsized role is becoming impossible to ignore.
It couldn’t come at a better time for Eli Lilly, which had an exceptional Q3. Revenue surged 54% year over year, beating Wall Street expectations, while management raised its full-year sales and EPS guidance. Darzalex, Zepbound and Mounjaro continue to dominate conversations on both the revenue and expectations front, making LLY the “growth engine” that ETF issuers are increasingly leaning on.
And lean they have.
That is a trend quite apparent across major funds: iShares US Pharmaceuticals ETF (NYSE:IHE) gives Lilly a commanding 26.9% weight, making the stock its undisputed driver. VanEck Pharmaceutical ETF (NASDAQ:PPH) follows closely with a 24.1% allocation.
Even diversified healthcare ETFs have gravitated toward Lilly’s orbit. The Harbor Health Care ETF (NYSE:MEDI), a fundamentally driven, actively managed healthcare fund, has been increasing its LLY exposure as the stock continues to deliver superior growth metrics. Currently, LLY holds almost 20% allocation in the fund.
Meanwhile, the Health Care Select Sector SPDR Fund (NYSE:XLV), the biggest and most followed healthcare ETF, has watched Lilly rise steadily within its top holdings as market-cap weighting naturally rewards Lilly’s rally. LLY holds almost 15% weightage in XLY.
The result: Investors who thought they were buying broad-based pharma exposure may actually be riding a stealth Eli Lilly trade.
That is not necessarily a bad thing. Lilly’s earnings momentum dwarfs its peers, and its guidance bump puts it among the most reliable growth stories in large-cap healthcare. Revenue forecast for 2025 is now at $63–$63.5 billion, above the $61.65 billion consensus, adjusted EPS estimates have lifted to $23–$23.70, also ahead of views. Plans for a $1.2 billion investment in expanding and upgrading its Lilly del Caribe manufacturing site in Puerto Rico is also encouraging. The planned upgraded oral solid medicines facility will add to Lilly’s portfolio spanning cardiometabolic health, neuroscience, oncology and immunology. All these are among the growth drivers of the company.
But it does raise a concentration question. As LLY grows into a super-cap, are ETFs becoming too dependent on a single stock? For now, investors aren’t complaining. With pharma ETFs rising between 8%–9% over the last month, Lilly’s gravitational pull is proving to be a very profitable orbit.
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