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Healthcare ETF (IYH) Hits New 52-Week High

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For investors seeking momentum, iShares U.S. Healthcare ETF (IYH - Free Report) is probably on the radar now. The fund hit a 52-week high, and is up about 21.6% from its 52-week low price of $166.89/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

IYH in Focus    

This ETF offers broad exposure to the healthcare sector with key holdings in pharma, healthcare equipment, biotech and managed healthcare. Holding 132 stocks in its basket, Johnson & Johnson (JNJ - Free Report) dominates the fund’s returns with 9.2% exposure while other firms account for less than 6.5% share. The product charges 43 basis points in annual fees (see: all the Healthcare ETFs here).

Why the Move?

Healthcare has been an area to watch lately given that it was the best-performing sector of the third quarter. The dual tailwinds of encouraging industry fundamentals and the sector’s defensive tilt led to the rally in the sector. The wave of mergers and acquisitions also added to its strength.

More Gains Ahead?

IYH has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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