Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.
There is currently an expanding list of 24 ETFs oriented to the health care sector with more on the way. The following analysis features a fair representation of ETFs available. We believe from these, investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.
ETFs are based on indices tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones and so forth. Also included are some so-called "enhanced" indices that attempt to achieve better performance through more active management of the index.
Where competitive issues exist and/or repetitive issues available at a fee cost saving, we mention those as other choices. New issues are coming to market consistently (especially globally) and sometimes these issues will need to become more seasoned before they may be included at least in our listings.
For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.
XLV (SPDR Healthcare Sector ETF) follows the Health Care Select Sector Index and like most SPDR issues is the granddaddy having been launched in December 1998. The index covers a wide spectrum of the industry from pharmaceuticals, equipment, providers and biotechnology. The expense ratio is .20%. Assets under Management (AUM) equal over $4 billion and average daily trading volume are over 8.7M shares. As of July 2011 the dividend is $.58 making the current yield 1.60% with YTD performance over 12.70%. An alternative choice could include IYH (iShares Dow Jones U.S. Healthcare ETF) follows the index of the same name. The expense ratio is higher at .48%. The constituents are similar to XLV while the YTD return as of July 2011 is 12%. Both ProShares and Direxion Shares maintain leveraged long and short ETFs for hedging or speculation needs.
Data as of July 2011
XLV Top Ten Holdings & Weightings
- Johnson & Johnson (JNJ): 12.94%
- Pfizer Inc (PFE): 11.56%
- Merck & Co Inc (MRK): 7.73%
- Abbott Laboratories (ABT): 4.92%
- UnitedHealth Group Inc (UNH): 4.00%
- Amgen, Inc. (AMGN): 3.85%
- Bristol-Myers Squibb Company (BMY): 3.53%
- Medtronic, Inc. (MDT): 2.94%
- Eli Lilly and Company (LLY): 2.71%
- Baxter International Inc. (BAX): 2.45%