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Why would a health care ETF invest in Phillip Morris?

edited August 18 in Fund Discussions
PINK (Simplify Health Care ETF)

Phillip Morris International = 3.62% of portfolio

Purchased Mar 31, 2025

Would this amount to ”shorting” health care as a hedging strategy?


(Data from Morningstar)

Comments

  • Maybe you can find an answer HERE
  • edited August 18
    Thanks for the link @Mark

    ”A case study from PMI’s Integrated Report 2021.”

    Reads like a letter to shareholders. PMI touts its efforts to become more health oriented, noting its recent acquisition of some businesses related to pharmaceuticals.

    A particularly interesting line …

    ”We also acknowledge that we have received criticism from medical societies about these acquisitions.”

    Just came across the discussion elsewhere and it got me to wondering. As far as PINK (etf) goes, it also makes sense to me that the manager might want to hedge his large position in health promoting companies with a small stake in a company known more for harming health.
  • I had a professor when I was an undergraduate who used to talk about “the contradictions of capitalism.” Might this be an example …. ?
  • edited August 18
    “the contradictions of capitalism”

    Must have been a smart prof. How true.
  • The report mentioned pharmaceutical are the smoke-free products (vaping, nicotine patch and chewing gum), but without saying they are for treating nicotine addiction.

    Medical marijuana makes a better case as a medicine than that of nicotine.
  • Tom Russo explains PM in his portfolio this way:
    Philip Morris International (PM) as one of the most remarkable examples in the author's portfolio of a company with the capacity to reinvest and transform itself. Over the past 14 years, PM has invested aggressively into developing Reduced Risk Products (RRPs) like IQOS, VEEV ONE, and ZYN. IQOS, its flagship heat-not-burn product, is now a major success in Japan and expanding in Western Europe.
    https://wealthtrack.com/how-to-make-the-cut-in-semper-vic-partners-private-funds-portfolio/
  • edited August 19
    I'm reminded of the 'Yes Prime Minister' episode called 'The Smoke Screen' where the Minister of Sport (a portly man who smokes and coughs up a lung) who's in-bed with the tobacco lobby becomes the Minister of Health.

    To wit:

  • if i recall, PINK is run for charity and offers irregular commentary on specific positions.
  • A cynic might opine that it bolsters the need for the other holdings!
  • A cynic might opine that it bolsters the need for the other holdings!

    Bingo!

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