What are some good healthcare ETFs?


Quick Answer

Four top ranked health care ETFs are iShares U.S. Healthcare Providers (IHF), Guggenheim S&P 500 Equal Weight Health Care (RYH), SPDR S&P Health Care Services (XHS) and PowerShares Dynamic Healthcare Sector Portfolio (PTH). As of March 2015, the Zachs research organization ranks these ETFs high because they target broad sectors of health care.

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Full Answer

Zachs places iShares at the top of the list because it includes companies that provide health insurance, diagnostics and specialized treatments. Tracking the Dow Jones U.S. Select Health Care Providers Index, iShares holds 49 securities with 13.8 percent of the $799.3 million of assets allocated to United Health and 9.1 percent allocated to Express Scripts.

The Guggenheim health care ETF has a buy rating from Zachs because it has a 0.40 percent expense ratio for the $666.5 million of assets under management. The ETF allocates an equal weighted 2 percent to 55 stocks, while tracking the S&P 500 Equal Weight Index Health Care. The top three performing stocks are HCA Holdings, Regeneron Pharmaceuticals and Biogen.

According to Zachs, another good health care ETF is the SPDR S&P Health Care Services fund with $183.4 million of AUM. It also uses equal weight technology but tracks the S&P Health Care Services Select Industry Index. Health care services make up one-third of the 56 stocks in the fund. The top three stocks are Select Medical, ExamWorks Group and Kindred Healthcare.

PowerShares Dynamic Healthcare ETF has $183.5 million of AUM. Zachs recommends this ETF that follows the DWA Healthcare Technical Leaders Index because half of the assets are allocated to biotechnology. Approximately 15 percent is allocated to three health care companies, which are Medivation, Regeneron Pharmaceuticals and Activis.

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