Exchange traded funds tracking U.S. healthcare stocks have justified their reputation as defensive sector plays in an uncertain economic environment this year.

Health Care Select Sector SPDR Fund (NYSEArca: XLV) is up 4.8% year to date, compared with a 4.2% loss for the S&P 500, according to investment researcher Morningstar. [ETF Chart of the Day: Healthcare]

“For investors looking for exposure to the healthcare sector, we view ETFs as an attractive investment option,” says Standard & Poor’s equity analyst Jeffrey Loo. [ETF Spotlight: Health Care]

“Overall, we believe healthcare valuations remain attractive as several sub-industries, such as pharmaceuticals and biotechnology, are trading well below their historical levels,” he wrote in a recent sector report. “We believe balance sheets are solid, with large cash balances driving higher dividend payments and even resulting in Amgen (NasdaqGS: AMGN) being the first biotechnology firm to pay a dividend. [ETF Flows Suggest Defensive Sector Rotation]

The healthcare sector represents about 12% of the S&P 500. The industry has been outperforming this year but also presents unique risks.

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