Vanguard Health Care Index Fund (NYSEArca: VHT), also rated “Overweight,” is down over 6% since early November, but like XLV, the fund contains high quality blue-chip pharmaceutical stocks. [Sector ETFs for Obama and the Fiscal Cliff]

“Sam Stovall, S&P Capital IQ’s Chief Equity Strategist, noted that the health care group is trading at a 17% discount to its median relative P/E ratio since 1995, and that six of its 10 sub-industries are projected to post above-market EPS growth in 2013. From a technical perspective, he added that the sector remains in a bullish channel that began in 2011, and has continued to trace out higher highs and higher lows since 2009,” S&P Capital wrote.

Other ways to play the sector with ETFs:

  • iShares Dow Jones US Healthcare Sector Index (NYSEArca: IYH)
  • iShares S&P Global Healthcare Sector Index Fund(NYSEArca: IXJ)
  • iShares Dow Jones U.S. Healthcare Providers Index Fund (NYSEArca: IHF)

Health Care Select Sector SPDR

Tisha Guerrero contributed to this article.