Comparing the ETFs of the Health Care Sector | ETF Trends

Some areas in the market are showing signs of life, and the health care sector’s related exchange traded funds (ETFs) could be one such area.

In the last few years, health care stocks have performed relatively the same as their related ETF in the S&P, Health Care Select Sector SPDR (XLV), writes Ron DeLegge for ETF Guide.

Now, the sector is seeing increased activity with mergers and takeovers, and more buyout deals could be on the way. Health care stocks also have pretty enticing valuations with current P/E ratios of around or below 10 compared to the S&P 500’s 11.9 multiple. Watch the trend lines, though:  most of these funds are close to their short-term trend lines, and none have crossed their 200-days.

Interested in health care ETFs but don’t know of any? Well here are a couple for you to ponder over:

  • iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH): down 8.6% year-to-date. The ETF is based on the Dow Jones Index and has 139 health care stocks. Stocks of companies are selected passively and weighted to their market capitalization or size, the medium size is just over $2 billion.


  • Health Care Select Sector SPDR (XLV): down 10% year-to-date. It is made of health care stocks within the S&P 500. It is the largest health care ETF with around $2 billion in assets. Companies included deal in health care equipment and supplies, health care providers and services, biotechnology and pharmaceuticals. The health care sector, the second largest of the sectors,  is around 15% of the S&P 500’s overall sector weighting.