In addition to generating positive returns for long-term investors, healthcare ETFs are a good way to build a foundational base. Vanguard’s healthcare ETF, for example, has produced positive returns for 13 of the past 14 years. There are some similarities and trade-offs between the Vanguard ETF and the healthcare sector. Its top holdings include CVS, UnitedHealth, and healthcare providers like GE and McKesson. It has an average annualized return of 17.3% over the past decade.
XLV ETF provides diversified exposure to some of the largest U.S. health care companies
If you’re looking to invest in the health care industry, the XLV ETF provides diversified exposure across a broad range of health-related industries. This is a popular choice among investors looking to reduce risk, while still getting exposure to some of the largest health care companies. XLV’s impressive depth of holdings makes it a great choice for a sector rotation strategy or a long-term tilt toward the health care industry.
The XLV ETF is a relatively conservative choice, holding 60 health care-related stocks that are included in the S&P 500 Index. It is weighted based on their size and profitability, but it also has a large concentration of top-tier companies. Johnson & Johnson, UnitedHealth Group, Pfizer, and other big names dominate the fund, with 22% of assets in the hands of Johnson & John. While this is a diversified portfolio, the focus on big-name stocks means that it’s a bit top-heavy. Investors may not be bothered by this, but if it means consistent revenue and profits for those companies, then it’s not a very good idea.
PJP, an ETF focused on biotechnology and next-generation cures, is a popular option for investors. The IBB fund has $11 billion in assets under management. This fund provides exposure to development-stage biotechs, which are still not profitable but are banking on FDA approval. It is more risky than the typical large-cap health care ETF, which relies on entrenched insurance firms and Big Pharma.
RYH ETF provides diversified exposure to all U.S.-listed pharmaceutical companies
RYH ETF is a diversified health care exchange-traded fund (ETF) that tracks the S&P 500 Equal Weight Health Care Total Return Index. The index includes over 70% of all health care companies in the U.S., including several of the largest pharmaceutical companies in the world. The underlying funds earn returns by investing in the stocks of health care companies, and the ETF pays dividends to shareholders.
Many large pharmaceutical companies operate ETFs, giving investors a chance to own a diversified portfolio of stocks while avoiding the idiosyncrasies of individual stocks. The recent COVID-19 pandemic has prompted heightened investor interest in a select group of pharmaceutical stocks. In addition to developing government-approved vaccines, these companies are racing to develop new vaccines.
RYH tracks an equal-weighted index of US health care companies. Its portfolio is comprised of health care companies from the S&P 500. The index is comprised of stocks with varying risk profiles, and this fund uses equal-weighting to minimize single company risks and spread them out among different sub-sectors. The fund’s portfolio is not overly concentrated in pharma companies, and is skewn more toward midcaps and small cap stocks. The fund rebalances its holdings quarterly.
KMED ETF seeks to provide investment results that track the performance of the Solactive Emerging Markets Healthcare Index
The KMED ETF seeks to provide investment returns that track the performance of the Solactive EmergING Markets Healthcare Index, which is comprised of companies incorporated in emerging markets. The index includes small, mid, and large-cap companies that are involved in the health industry, including pharmaceutical manufacturing, biotechnology, and hospital management. The fund also invests in emerging-markets healthcare services.
The KMED ETF seeks to achieve this objective by investing in stocks and bonds of emerging-market health care companies. Its performance is based on a representative sampling strategy that can affect its investment results. Additionally, the Fund may be required to hold cash in certain circumstances, which can adversely affect its return. Furthermore, the Fund may not be able to invest in all of the components of the Underlying Index, as certain securities are subject to restrictions or may even be suspended from trading.
The KMED ETF aims to provide investment results that correspond to the performance of the Solactive Emerging Market Health Care Index. The fund is managed by KraneShares, a company that has filed its application with the Securities and Exchange Commission. The Fund does not claim to be a “favorable” investment for you. The KMED ETF is recommended for investors with low risk tolerances and a history of low volatility.