Maximizing Your Returns: Top Health Care ETFs to Invest In Today
Investors know that diversification is key to a solid portfolio, and exchange-traded funds (ETFs) are an excellent way to achieve this. Health care ETFs are among the most popular as they offer investors exposure to a diverse range of companies in the fast-growing healthcare sector. However, with so many options available, it can be challenging to know which funds to invest in. In this article, we’ll examine the top health care ETFs to invest in today.
1. Health Care Select Sector SPDR Fund (XLV)
The Health Care Select Sector SPDR Fund (XLV) is one of the largest and most popular health care ETFs on the market today. It invests in a vast range of companies, including biotech, pharmaceuticals, and medical equipment and supplies. XLV has consistently delivered strong returns to investors, with an average annual return of over 14% in the last decade. It’s also one of the oldest healthcare ETFs, having been launched in 1998.
2. iShares Global Healthcare ETF (IXJ)
The iShares Global Healthcare ETF (IXJ) is another popular health care ETF that invests in a diversified range of healthcare companies. However, what sets it apart is its global focus, with investment exposure to companies in both developed and emerging markets. IXJ has a lower expense ratio than many other healthcare ETFs and has delivered consistent returns to investors over the years.
3. Vanguard Health Care ETF (VHT)
The Vanguard Health Care ETF (VHT) is a low-cost health care ETF that invests in companies involved in biotech, pharmaceuticals, healthcare equipment, and services. VHT has one of the lowest expense ratios of all healthcare ETFs, making it an excellent investment option for cost-conscious investors. It also consistently outperforms its benchmark, the MSCI US Investable Market Health Care 25/50 Index.
4. iShares US Medical Devices ETF (IHI)
The iShares US Medical Devices ETF (IHI) is a uniquely focused healthcare ETF that invests exclusively in medical device companies. This focus makes it an ideal investment option for those seeking exposure to a niche market within the healthcare sector. IHI has delivered impressive returns to investors, with its average annual return over the last decade exceeding 18%.
5. Invesco DWA Healthcare Momentum ETF (PTH)
The Invesco DWA Healthcare Momentum ETF (PTH) invests in stocks exhibiting strong momentum within the healthcare sector. This approach results in the fund investing in a concentrated portfolio of healthcare companies displaying strong price momentum. PTH has delivered impressive returns over the last decade, with an average annual return of over 22%.
Conclusion
Investors seeking exposure to the healthcare sector should consider investing in ETFs to achieve diversification and potentially maximize returns. The above-listed health care ETFs are among the top performers in the sector and are effectively diversified across healthcare sub-sectors. When investing in any ETF, investors must thoroughly research the fund’s investment strategy, objectives, fees, and performance history before making any investment decisions.
