Earnings Trigger Volume Spike in Pharma ETF

On Tuesday it was Pfizer (NYSE: PFE). Today, it is Merck (NYSE: MRK). Earnings reports from the two pharmaceuticals giants and Dow components have triggered two consecutive volume spikes in the Market Vectors Pharmaceuticals ETF (NYSE: PPH), an arguably under-appreciated play on one this year's top-performing sectors.Pfizer's slack first-quarter report and disappointing guidance released Tuesday helped send volume in PPH to roughly nine times the ETF's 90-day average.In afternoon trading Wednesday, nearly 497,000 shares have changed hands in PPH compared with average daily volume of 61,650. Earlier today, Merck cut its earnings forecast to $3.45 to $3.55 per share on a revenue decline of three percent to four percent. The company previously forecast expected earnings of $3.60 to $3.70 per share on a revenue decline of one percent to two percent.Pfizer and Merck are PPH's second- and fourth-largest holdings, respectively, combing for about 17.6 percent of the ETF's weight. Dow component Johnson & Johnson (NYSE: JNJ) is PPH's largest holding with an allocation of about 11.8 percent.The unimpressive earnings and guidance from Pfizer and Merck are weighing on PPH a bit as the ETF has lost about 1.3 percent in the past week, though the fund's struggles over the past two days come after it surged nearly 15 percent year-to-date through Tuesday.With health care being one of the top-performing sectors not just this year, but over the past three years, investors have started to acknowledge PPH's story. Three weeks ago, the ETF had less than $230 million in assets under management. As of April 30, that number had swelled to $277.3 million.Since PPH's 26 holdings are primarily pure pharmaceuticals play, the ETF is not directly comparable to popular health care fund such as the Health Care Select Sector SPDR (NYSE: XLV) and the Vanguard Health Care ETF (NYSE: VHT). XLV and VHT feature exposure to biotechnology, medical device and insurance firms in addition to significant allocations to traditional pharmaceuticals stocks. Due in large part to the biotech exposure, XLV and VHT have outperformed pharmaceuticals-focused ETFs this year.A more direct rival to PPH is the PowerShares Dynamic Pharmaceuticals Portfolio (NYSE: PJP). Although PJP features fair biotech exposure, Johnson & Johnson, Merck and Pfizer combine for about 15 percent of that ETF's weight. However, PJP has not seen a volume increase on par with PPH's Wednesday. Both ETFs are off more than one percent today.For more on pharmaceuticals ETFs, click here.