This article was originally published on ETFTrends.com.
When you take the health care sector-specific S&P 500 Health Care Index with a year-to-date return of 5.23 percent and mix it with the S&P SmallCap 600 with a year-to-date return of 12.40 percent, you create an explosion of returns found in the Invesco S&P SmallCap Health Care ETF (PSCH) .
PSCH is the best performing ETF of the year up 36.65% YTD according to BarChart.com data (excluding leveraged, inverse and volatility products) as of Wednesday, July 11.
PSCH tracks the investment results of the S&P SmallCap 600® Capped Health Care Index with at least 90 percent of its assets allocated to common stocks of small cap health care companies providing healthcare-related products, as well as facilities and services, including biotechnology, pharmaceuticals, medical technology, and supplies. The index has been producing otherworldly returns with a year-to-date gain of 35.77 percent and 54.65 percent the past 12 months.
Since it tracks the S&P SmallCap 600® Capped Health Care Index, PSCH has been a prime beneficiary of its returns with 36.65% percent year-to-date gain and a 61.18 percent return the past year, according to BarChart.com. As such, it is moving well above its 200-day moving average evidenced in the chart below.
Relative to its peers, PSCH has been outperforming in all benchmarks within the past five years, particularly in the first half of 2018.
The growth of the health care sector looks imminent, particularly given last Friday's jobs report data published by the Bureau of Labor Statistics, which showed an increase of 215,000 jobs–9.2 percent higher than original forecasts–with health services being one of the top beneficiaries of the increase. Within the education and health services sector 54,000 new positions were created in June and of that number, about 25,000 came as a result of hiring in the health care sector.
Furthermore, a recent report published by TMR Research revealed that the health care sector is poised for further growth as it shifts to a more consumer-minded industry. Per TMR Research, "The healthcare industry has started witnessing a massive transformation in the manner in which healthcare services are delivered and paid for. In the recent years, the number of knowledgeable, tech-savvy consumers with advanced mobile computing devices has massively increased. This massive population of consumers is increasingly wanting to be the active respondent or decision-maker when it comes to purchasing or consuming the services of their choice, taking up the responsibility of managing their own health."
With these latest developments, PSCH could stand to further benefit as the industry, technology, market, and business model progresses, especially with forthcoming innovations in the small-cap health care space.
For more health care ETF trends, click here.
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