To The Moon

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The healthcare sector is known for its low valuations, strong cash flow, and innovative edge, making it a favorite among Wall Street investors. Its resilience is evident, as consumers just can’t cut back on healthcare spending!

Here are six standout healthcare ETFs that make it easy for investors to dive into this lucrative industry:

1. $iShares Global Healthcare ETF(IXJ)$

This fund has grown 13.9% year-to-date (as of September 26) and 19.9% over the past year, with an impressive annualized return of 11.4% over five years.

Plus, it offers a 1.2% dividend yield. IXJ is packed with major biopharma players, with $Eli Lilly(LLY)$ $Merck(MRK)$ $AstraZeneca PLC(AZN)$ $Novo-Nordisk A/S(NVO)$ making up about 21% of the fund.

2. $Vanguard Health Care ETF(VHT)$

This ETF invests in all the stocks of the S&P 500 Healthcare Index. It’s up 13.1% year-to-date and manages $18.5 billion in assets.

VHT also offers a 1.2% dividend yield, and most of its stocks have “buy” ratings from Wall Street analysts. The fund’s average target price is $354.75, which means there’s a potential upside of 25.8%!

3. Fidelity Select Health Care (FSPHX)

This fund has a strong focus on biotech, with big names like $Eli Lilly(LLY)$ (8.2%), $Regeneron Pharmaceuticals(REGN)$ (4.4%), and $Merck(MRK)$ (3.9%) in its portfolio. It’s up 13.2% this year and has delivered a solid annual return of 9.8% over the past decade.

4. $Health Care Select Sector SPDR Fund(XLV)$

XLV has seen a 13.5% rise year-to-date and a 19.9% increase over the past year, with an annualized return of 13.2% over the last five years. With $41.5 billion in assets, its top ten holdings account for a whopping 57%.

Pharmaceuticals make up 31%, while healthcare providers and services represent 21%. Just the top four— $UnitedHealth(UNH)$ $Eli Lilly(LLY)$ $Johnson & Johnson(JNJ)$ $AbbVie(ABBV)$ —account for around 35% of the fund!

5. $Invesco S&P 500 Equal Weight Health Care ETF(RSPH)$

This ETF leans toward biotech within the S&P 500, ensuring that no single stock takes up more than 2% of the fund. RSPH is a smaller player, with assets of just $946 million. It’s up 7.8% this year, trailing behind its peers at 10.3%, but it has outperformed the sector over the past three, five, and ten years.

6. $Spdr S&P Biotech Etf(XBI)$

Focusing on small to mid-cap biotech firms, this ETF comes with a higher risk. XBI has returned 10.1% in 2024 and a fantastic 34.2% over the past year, surpassing industry average of 20.5%. This smart beta uses a modified equal-weight, emphasizing stock selection.

All in all, driven by technological advancements and an aging population the healthcare sector is set for continued growth. These ETFs offer investors a chance to secure solid returns and diversify investments.