Investors are becoming well-acquainted with what has become an indomitable run for the healthcare sector, the third-largest sector allocation in the S&P 500.
Of the top 10 non-leveraged sector ETFs on a year-to-date basis, six are healthcare funds. Five non-leveraged healthcare ETFs are up at least 15% over the past 90 days. The Health Care Select Sector SPDR (NYSEArca: XLV) is continuing its outperformance of the broader market and is the top performer among the nine sector SPDR ETFs on a year-to-date basis after placing second last year. [Healthcare ETFs can Keep Soaring]
Up 8.3% this year, XLV has hauled in $1.35 billion in new assets, the best total among the nine sector SPDRs, but it is not just large-cap healthcare names that are outperforming.
“In the U.S., the healthcare sector significantly outperformed broad parent indices in the first quarter 2015, across capitalization ranges. On a total return basis, the S&P 500® Health Care sector index gained 6.5% in the first quarter, while the S&P 500 ended the quarter up 1%. The S&P SmallCap 600® Health Care sector index led the pack, ending the quarter up over 15%, while the S&P SmallCap 600 gained 4%,” according to a note by S&P Dow Jones Indices senior analyst Chris Bennett.
Indeed, small-cap healthcare stocks have delivered stellar returns again this year. For example, the PowerShares S&P SmallCap Health Care Portfolio (NasdaqGS: PSCH), the small-cap answer to XLV, is up 16.6%. PSCH was one of 33 ETFs to hit 52-week highs Friday.
What it lacks in pharmaceuticals and biotech exposure, PSCH makes up for with heavy weights to healthcare equipment manufacturers and services providers. Those sub-sectors combine for 65.3% of PSCH’s weight. That is nearly double the weight to large-cap equipment makers and services providers featured by XLV. [Small-Cap Sector ETF Star]