Investors can do good for the world at large while still profiting, and that effort isn’t confined to environmental, social, and governance (ESG) strategies.
Take the case of the IQ Healthy Hearts ETF (HART). HART, which debuted in January 2021, follows the IQ Candriam Healthy Hearts Index and directs a portion of its collected fees to the American Heart Association. HART’s 79 holdings have exposure to the fight against heart disease, and that’s a worthy cause.
“Heart disease is the leading cause of death for men, women, and people of most racial and ethnic groups in the United States,” according to the Centers for Disease Control (CDC). “One person dies every 36 seconds in the United States from cardiovascular disease. About 659,000 people in the United States die from heart disease each year—that’s 1 in every 4 deaths.”
Additionally, heart disease is a major drag on the U.S. economy, leading to, by some estimates, hundreds of billions of dollars in lost productivity every year. With data points such as those, it’s clear that at the investment level, it requires some depth to adequately address the fight against heart disease.
HART answers that call for a simple reason: It’s not a dedicated healthcare ETF. In addition to a 64.6% allocation to healthcare equities, HART features exposure to consumer discretionary and staples names as well as tech stocks, among others. That’s impressive breadth that positions HART to capitalize on attractive healthcare trends.
There is “innovation across the pharmaceutical sector can accelerate, especially in biotechnology ― an area that uses material from living organisms to create medicines,” according to BlackRock research.
Including Dow components Johnson & Johnson (NYSE:JNJ) and Merck (NYSE:MRK), six of HART’s top 10 holdings are pharmaceutical stocks. That’s an attractive trait because blue chip pharma companies are cash-rich enterprises known for growing dividends and other quality traits.
HART also features some exposure to exciting trends such as the intersection of healthcare and technology, which could improve heart disease prevention and outcomes over time.
That combination could offer “investors opportunities to capitalize on innovation. While the healthcare sector has been slow to embrace technological change, the momentum is beginning to shift. This should lead to progress in areas such as precision surgical tools and minimally invasive procedures,” concluded BlackRock.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.