The healthcare sector, the third-largest sector weight in the S&P 500, has been scuffling a bit this year thanks in large part to struggles by biotechnology stocks, healthcare exchange traded funds of several different varieties have encountered stumbling blocks.
The silver lining is that healthcare has been one of the most beloved sectors during the current bull market, meaning many market observers see the group’s recent pullback as an opportunity to add to or initiate positions in healthcare stocks or ETFs such as the Health Care Select Sector SPDR (NYSEArca: XLV).
Related: Healthcare ETFs Ready to Rally
For XLV and rival healthcare ETFs, the good news is that the U.S. economy moving into the late-cycle phase, overall growth may slow and signs of an economic slowdown could pop up. Consequently, investors may also turn to defensive sectors that are less economically sensitive, such as health care.
“As for his favorite sectors, Wells Fargo Chief Equity Strategist John Manley said he likes health care best due to the aging population and large amounts of government money coming into the sector. Following health care, he is a big fan of technology stocks, primarily those that connect businesses,” reports TheStreet.com.[related_stories]
Investors seeking high-quality exposure to the health care industry have a number of options available, including XLV, the iShares U.S. Healthcare ETF (NYSEArca: IYH) and Vanguard Health Care ETF (NYSEArca: VHT).