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Should You Invest in the Vanguard Health Care ETF (VHT)?
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Launched on 01/26/2004, the Vanguard Health Care ETF (VHT - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $17.27 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. VHT seeks to match the performance of the MSCI US Investable Market Health Care 25/50 Index before fees and expenses.
The MSCI US Investable Market Health Care 25/50 Index is made up of stocks of U.S. companies within the health care sector.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.33%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Unitedhealth Group Inc. (UNH - Free Report) accounts for about 8.79% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Pfizer Inc. (PFE - Free Report) .
The top 10 holdings account for about 47.97% of total assets under management.
Performance and Risk
The ETF has lost about -5.05% so far this year and is down about -6.04% in the last one year (as of 01/02/2023). In that past 52-week period, it has traded between $219.51 and $264.71.
The ETF has a beta of 0.76 and standard deviation of 22.43% for the trailing three-year period, making it a medium risk choice in the space. With about 405 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Health Care ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VHT is an excellent option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares Global Healthcare ETF (IXJ - Free Report) tracks S&P Global 1200 Healthcare Sector Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. IShares Global Healthcare ETF has $4.43 billion in assets, Health Care Select Sector SPDR ETF has $42.29 billion. IXJ has an expense ratio of 0.40% and XLV charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Vanguard Health Care ETF (VHT)?
Launched on 01/26/2004, the Vanguard Health Care ETF (VHT - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $17.27 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. VHT seeks to match the performance of the MSCI US Investable Market Health Care 25/50 Index before fees and expenses.
The MSCI US Investable Market Health Care 25/50 Index is made up of stocks of U.S. companies within the health care sector.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.33%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Unitedhealth Group Inc. (UNH - Free Report) accounts for about 8.79% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Pfizer Inc. (PFE - Free Report) .
The top 10 holdings account for about 47.97% of total assets under management.
Performance and Risk
The ETF has lost about -5.05% so far this year and is down about -6.04% in the last one year (as of 01/02/2023). In that past 52-week period, it has traded between $219.51 and $264.71.
The ETF has a beta of 0.76 and standard deviation of 22.43% for the trailing three-year period, making it a medium risk choice in the space. With about 405 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Health Care ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VHT is an excellent option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares Global Healthcare ETF (IXJ - Free Report) tracks S&P Global 1200 Healthcare Sector Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. IShares Global Healthcare ETF has $4.43 billion in assets, Health Care Select Sector SPDR ETF has $42.29 billion. IXJ has an expense ratio of 0.40% and XLV charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.