Healthcare sector has always provided a good investment opportunity for trading markets. It is a growing sector of many developed economies. In 2008 it outpaced the US ETF market by 10%. It came to a halt after that and rose by 3% in 2010 after the market rebounded. Healthcare ETFs are more acceptably described as defensive investments since they can produce limited returns in some sectors.
Healthcare ETFs have a higher expense ratio since they are sector based. Some investors do not consider them suitable for long term investment in taxable accounts. Some well performing healthcare ETFs are provided by ProShares, State Street, iShares and Vanguard.
Health Care Select Sector SPDR Fund (XLV) tracking the S&P Health Care Select Sector index is a well performing ETF. This ETF is offered by State Street Global Advisors with an expense ratio of 0.22%. it has major holdings in Johnson and Johnson, Pfizer, Merck, Abbot Laboratories, Eli Lilly and United health group. The diversification in different healthcare sectors has made this fund an attractive choice for all-exposure investors.
iShares Dow Jones US Healthcare Providers Index Fund (IHF) is another top performing ETF in healthcare market. It tracks the Dow Jones US Select Health Care Providers Index. This is also a diversified healthcare ETFs with top holdings in Wellpoint, United health group, Medco health solutions, Humana, Quest Diagnostics and Aetna.
Vanguard Health Care ETF (VHT) tracks the MSCI US Investible Market Health Care 25/50 Index. It is amongst the top ten performing healthcare ETFs with an expense ratio of 0.24%. Major holdings include Johnson & Johnson, Pfizer, Merck, Bristol Myers, Abbot Laboratories, Amgen and Eli Lilly.
Other popular healthcare ETFs include:
The diversity of healthcare sectors have also allowed pharmaceutical and biotechnology sectors to venture into the healthcare ETF market. ETFs targeted specifically to pharmaceuticals and biotechnology firms are rated amongst the top 10 ETFs. The good returns to make them vulnerable to risk but they can help in accomplishing a variety of investment goals.
Some of the top performing biotech and pharma ETFs include:
Subsector ETFs are also more risky since they are dedicated to small corners of the market like the pharma and biotech ETFs targeting the components of health care industry. It all depends on the investor’s way of utilizing these healthcare ETFs which can provide strength to the portfolio of investments.