Healthcare ETFs Continue to Impress

The healthcare sector is one of this year’s best-performing groups, a fact reflected by the Health Care Select Sector SPDR (NYSEArca: XLV), the largest healthcare exchange traded fund by assets.

Year-to-date, XLV is up nearly 15%, underscoring the point that healthcare is one of the best-performing sectors after technology and consumer discretionary, and some market observers believe healthcare stocks can continue surging.

“The S&P 500 health-care sector has been on a tear in recent months, on track for its best quarter in five years and surging to an all-time high on Friday. Names such as Eli Lilly, Biogen and Pfizer are among the biggest winners in the last three months, with double-digit gains,” reports CNBC.

XLV allocates about two-thirds of its combined weight to pharmaceuticals and biotechnology stocks. There are other catalysts to consider, including that the U.S. economy is 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 healthcare.

‘XLV’ ETF Activity

Some traders are noting relatively benign options activity in XLV.

“In terms of options activity across the health-care sector, there’s remarkably little activity within single stocks, said Stacey Gilbert, head of derivative strategy at Susquehanna,” according to CNBC.