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Should You Invest in the Vanguard Health Care ETF (VHT)?
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The Vanguard Health Care ETF (VHT - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $16 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. VHT seeks to match the performance of the MSCI US Investable Market Health Care 25/50 Index before fees and expenses.
The MSCI US Investable Market Health Care 25/50 Index is made up of stocks of U.S. companies within the health care sector.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.28%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 7.19% of total assets, followed by Unitedhealth Group Inc. (UNH - Free Report) and Pfizer Inc. (PFE - Free Report) .
Performance and Risk
The ETF has lost about -10.26% so far this year and was up about 4.82% in the last one year (as of 02/25/2022). In that past 52-week period, it has traded between $218.21 and $267.51.
The ETF has a beta of 0.83 and standard deviation of 20.93% for the trailing three-year period, making it a medium risk choice in the space. With about 455 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Health Care ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VHT is an excellent option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
ARK Genomic Revolution ETF (ARKG - Free Report) tracks N/A and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. ARK Genomic Revolution ETF has $3.67 billion in assets, Health Care Select Sector SPDR ETF has $32.97 billion. ARKG has an expense ratio of 0.75% and XLV charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Vanguard Health Care ETF (VHT)?
The Vanguard Health Care ETF (VHT - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $16 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. VHT seeks to match the performance of the MSCI US Investable Market Health Care 25/50 Index before fees and expenses.
The MSCI US Investable Market Health Care 25/50 Index is made up of stocks of U.S. companies within the health care sector.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.28%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 7.19% of total assets, followed by Unitedhealth Group Inc. (UNH - Free Report) and Pfizer Inc. (PFE - Free Report) .
Performance and Risk
The ETF has lost about -10.26% so far this year and was up about 4.82% in the last one year (as of 02/25/2022). In that past 52-week period, it has traded between $218.21 and $267.51.
The ETF has a beta of 0.83 and standard deviation of 20.93% for the trailing three-year period, making it a medium risk choice in the space. With about 455 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Health Care ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VHT is an excellent option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
ARK Genomic Revolution ETF (ARKG - Free Report) tracks N/A and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. ARK Genomic Revolution ETF has $3.67 billion in assets, Health Care Select Sector SPDR ETF has $32.97 billion. ARKG has an expense ratio of 0.75% and XLV charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.