When it comes to creating a well-diversified portfolio, healthcare stocks have traditionally offered a variety of benefits.
As an innovative sector, healthcare companies offer the potential to build long-term portfolio growth. Additionally, healthcare is often considered a defensive sector and potential safe haven during economic downturns.
However, uncertain U.S. federal policy could add volatility to many U.S. healthcare strategies down the line. One easy way to get around these concerns is to invest in healthcare companies outside the United States. In fact, international healthcare companies can offer a portfolio even more diversification than a domestic strategy could.
In particular, investing in China’s healthcare system could offer an interesting alternative to U.S. exposure. Favorable policy from China’s government and continued innovation from health companies like Mindray could continue to drive competitive growth in the sector.
That beingsaid, finding leading China healthcare companies could be a daunting prospect for the uninitiated. This is where an ETF with an experienced portfolio team can offer a simple solution.
China’s Healthcare KURE
One such fund is the KraneShares MSCI All China Health Care Index ETF (KURE). The ETF is designed to offer disciplined long-term growth through investment in some of China’s top healthcare companies. This includes Mindray, Jiangsu Hengrui, and Innovent Biologics, among others.
As a further lever for diversification, KURE primarily invests in a mix of large- and midcap securities. Taking on midcaps could offer additional avenues for long-term growth that would otherwise be missed by a large-cap strategy.
Currently, KURE’s performance is outpacing that of its U.S.-focused peers. The chart below illustrates how KURE has seen significant YTD growth. XLV, one of the largest healthcare ETFs, is witnessing faltering performance.
Even with tariff concerns sending some investors out of China’s markets, KURE is still seeing good flows data. FactSet data shows that as of May 15, 2025, KURE has seen over $25 million in net flows over the past three months.
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