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Top 10 Health Care ETFs

IHF (iShares DJ U.S. Health Care Providers ETF) tracks the Dow Jones U.S. Select Healthcare providers Index which measures the health care provider subsector of the U.S. equity market. As such the index contains fewer holdings. The fund was launched in May 2006. The expense ratio is .48%. AUM equal $355 million with average daily trading volume over 145K shares. As of July 2011 the annual dividend is negligible but the YTD return is nearly 19%. 

Data as of July 2011

IHF Top Ten Holdings & Weightings

  1. UnitedHealth Group Inc (UNH): 14.08%
  2. WellPoint, Inc. (WLP): 8.46%
  3. Express Scripts (ESRX): 7.70%
  4. Medco Health Solutions, Inc. (MHS): 6.84%
  5. Aetna, Inc. (AET): 5.41%
  6. Cigna Corporation (CI): 4.69%
  7. Humana (HUM): 4.57%
  8. Laboratory Corporation of America Holdings (LH): 3.50%
  9. Quest Diagnostics, Inc. (DGX): 3.38%
  10. DaVita Inc (DVA): 3.10%

IXJ (iShares S&P Global Health Care ETF) follows the S&P Global Health Care Index including a wide range of companies from biotech, manufacturing, medical devices and pharmaceuticals. The fund was launched in November 2001. The expense ratio is .48%. AUM equal $550 million with average daily trading volume around 60K shares. As of July 2011 the annual dividend was $.80 making the current yield 1.40% with YTD return of 11.50%.

Data as of July 2011

IXJ Top Ten Holdings & Weightings

  1. Johnson & Johnson (JNJ): 7.82%
  2. Novartis AG (NVSEF): 7.42%
  3. Pfizer Inc (PFE): 6.98%
  4. Roche Holding AG (RHHVF): 5.03%
  5. GlaxoSmithKline PLC (GLAXF): 4.73%
  6. Merck & Co Inc (MRK): 4.67%
  7. Sanofi (SAN): 3.78%
  8. Abbott Laboratories (ABT): 3.51%
  9. AstraZeneca PLC (AZN): 2.94%
  10. Bayer AG (BAYN): 2.85%

 

The health care sector has enjoyed a positive first half of 2011 despite so many uncertainties surrounding government health care changes and mandates. There is a lot to choose from in terms of indices linked to ETFs. Some are passive and duplicative relatively. It's essential to remember it's really a game of battleship for sponsors seeking to be first to a sector space or just being competitive in the space. This is their business interest apart from your investment interest. You should always ignore their interests and align your choices with what serves your objectives best.

Investors should note that in a rising market particularly ETFs linked to enhanced issues will tend to outperform conventional index linked issues. I've not done enough analysis to determine their relative performance during down market periods.

New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned. 

For further information about portfolio structures using this or other ETFs see www.etfdigest.com .

You may address any feedback to: feedback@etfdigest.com   

 

(Source for holding data is from ETF Database and from various sponsors.)

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.

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