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Should You Invest in the iShares U.S. Healthcare ETF (IYH)?
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Designed to provide broad exposure to the Healthcare - Broad segment of the equity market, the iShares U.S. Healthcare ETF (IYH - Free Report) is a passively managed exchange traded fund launched on 06/12/2000.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options 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 3, placing it in top 19%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $3.08 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. IYH seeks to match the performance of the Dow Jones U.S. Health Care Index before fees and expenses.
The Russell 1000 Health Care RIC 22.5/45 Capped Gross Index measures the performance of the healthcare sector of the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 9.03% of total assets, followed by Unitedhealth Group Inc (UNH - Free Report) and Eli Lilly (LLY - Free Report) .
The top 10 holdings account for about 51.27% of total assets under management.
Performance and Risk
The ETF has lost about -6.36% and is down about -3.05% so far this year and in the past one year (as of 03/16/2023), respectively. IYH has traded between $249.77 and $300 during this last 52-week period.
The ETF has a beta of 0.71 and standard deviation of 19.93% for the trailing three-year period, making it a medium risk choice in the space. With about 116 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Healthcare ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYH is an outstanding 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.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $16.28 billion in assets, Health Care Select Sector SPDR ETF has $38.04 billion. VHT has an expense ratio of 0.10% 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 iShares U.S. Healthcare ETF (IYH)?
Designed to provide broad exposure to the Healthcare - Broad segment of the equity market, the iShares U.S. Healthcare ETF (IYH - Free Report) is a passively managed exchange traded fund launched on 06/12/2000.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options 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 3, placing it in top 19%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $3.08 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. IYH seeks to match the performance of the Dow Jones U.S. Health Care Index before fees and expenses.
The Russell 1000 Health Care RIC 22.5/45 Capped Gross Index measures the performance of the healthcare sector of the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 9.03% of total assets, followed by Unitedhealth Group Inc (UNH - Free Report) and Eli Lilly (LLY - Free Report) .
The top 10 holdings account for about 51.27% of total assets under management.
Performance and Risk
The ETF has lost about -6.36% and is down about -3.05% so far this year and in the past one year (as of 03/16/2023), respectively. IYH has traded between $249.77 and $300 during this last 52-week period.
The ETF has a beta of 0.71 and standard deviation of 19.93% for the trailing three-year period, making it a medium risk choice in the space. With about 116 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Healthcare ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYH is an outstanding 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.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $16.28 billion in assets, Health Care Select Sector SPDR ETF has $38.04 billion. VHT has an expense ratio of 0.10% 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.