The healthcare sector is the third-largest sector in the S&P 500 and has been a primary driver of the current bull market. That is until this year when thanks in large part to struggles by biotechnology stocks, healthcare exchange traded funds of several different varieties have encountered stumbling blocks.
However, that does not mean the bull thesis for the widely followed sector is damaged. With healthcare earnings season coming up, health care stocks could be one of the few bright spots in the markets and exchange traded funds that track the sector could lead ahead.
Based on a percentage of “Buy” ratings at the end of March, analysts are most optimistic on the health care sector, according to FactSet. About 61% of analysts had a Buy rating on health care at the end of the first quarter.
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The good news is that the U.S. economy moving into the late-cycle phase, overall growth may slow and signs of an economic slowdown could pop up. Consequently, investors may also turn to defensive sectors that are less economically sensitive, such as health care. [Read More: Sector ETFs for the Late Business Cycle ]
The Affordable Care Act has helped millions of Americans receive healthcare coverage, with the uninsured rate now at a seven-year low, bolstering the outlook for healthcare services and sector-related exchange traded funds.
The uninsured rate has declined almost 6 percentage points since late 2013, before the ACA, or Obamacare, took effect.
Without further ado, here is a look at some well-known and undiscovered healthcare ETFs. Be sure to check back tomorrow for a similar list devoted to biotechnology ETFs.
Traditional, Cap-Weighted Healthcare ETFs
- Health Care Select Sector SPDR (XLV)
- Vanguard Health Care ETF (VHT)
- iShares U.S. Healthcare ETF (IYH)
- Fidelity MSCI Health Care Index ETF (FHLC)
- PowerShares S&P SmallCap Health Care Portfolio (PSCH)
- Market Vectors Generic Drugs ETF (GNRX)
- SPDR Pharmaceuticals ETF (XPH)
- Market Vectors Pharmaceutical ETF (PPH)
- iShares U.S. Pharmaceuticals ETF (IHE)
- PowerShares Dynamic Pharmaceuticals Portfolio (PJP)
Smart Beta Healthcare ETFs
- First Trust Health Care AlphaDEX Fund (FXH)
- Guggenheim S&P Equal Weight Healthcare ETF (RYH)
- PowerShares DWA Healthcare Momentum Portfolio (PTH)
Specialty Industry Funds
- iShares U.S. Medical Devices ETF (IHI)
- SPDR S&P Health Care Services ETF (XHS)
- iShares U.S. Healthcare Providers ETF (IHF)
- SPDR S&P Health Care Equipment ETF (XHE)
Want more Healthcare ETF news and analysis? Visit: www.etftrends.com/healthcare
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.