Healthcare stocks have been on a steady climb in 2024, with the S&P 500 Health Care Index up 12.3% so far. While this is a positive shift after two years of sluggish gains and losses, the sector still lags behind the broader S&P 500, which has soared 20.5% year to date.
For healthcare investors, this might feel like the industry isn’t reaching its full potential yet.
However, healthcare is undergoing major changes, driven by advancements in telehealth, biotechnology, and data analytics.
With an aging population increasingly relying on healthcare services, the sector is poised for long-term growth. If you’re looking for reliable, innovative investments, healthcare ETFs could be your best bet.
In this post, we share the top healthcare ETFs you should buy now. Just keep reading!
Best Healthcare ETFs to Buy Now
Here are the best healthcare ETFs to buy now, if you are considering buying one.
1. Vanguard Health Care ETF (VHT)
Boasting an impressive 13.1% gain so far in 2024, VHT is undoubtedly a top choice for healthcare investors.
With $18.5 billion in assets and a low expense ratio of just 0.1%, VHT offers a cost-effective way to invest in the healthcare sector. This ETF tracks the S&P 500 Health Care Index and is fully invested in healthcare stocks, providing a strong portfolio foundation.
Its steady 1.2% dividend yield also adds to its appeal for those seeking income. If you’re interested in a healthcare ETF that combines low costs, solid dividend returns, and exposure to cutting-edge technologies like AI, Vanguard Health Care ETF should be on your radar.
2. Health Care Select Sector SPDR ETF (XLV)
As one of the largest healthcare ETFs, Health Care Select Sector SPDR ETF (XLV) has $41.5 billion in assets and has delivered a solid performance, up 13.5% this year.
With a long-term annual average return of 13.2%, XLV has been a consistent performer in the healthcare space.
The fund is top-heavy, with its top 10 holdings making up 57% of its assets, and a strong focus on pharmaceutical companies and healthcare providers like UnitedHealth, Eli Lilly, and Johnson & Johnson.
Its low 0.09% expense ratio and reliable 1.4% yield also make it a smart choice for investors looking to enter the healthcare sector with minimal cost and risk.
3. iShares Global Healthcare ETF (IXJ)
The iShares Global Healthcare ETF offers a global perspective on healthcare, with a strong performance in 2024, up 13.9%.
This ETF stands out with its exposure to international healthcare stocks, giving investors access to leading companies like AstraZeneca and Novo Nordisk.
IXJ also taps into emerging healthcare technologies such as AI and robotics. This makes it a forward-looking choice for investors who have enough space in their portfolios for future prospects.
With a 1.2% dividend yield and a five-year annualized return of 11.4%, IXJ is a solid option for those seeking both growth and income. Although it carries a slightly higher expense ratio of 0.41%, its global diversification and tech focus justify the cost.
4. Fidelity Select Health Care (FSPHX)
Delivering a 13.2% gain in 2024, this fund has been a consistent player in the healthcare ETF space this year so far.
The Fidelity Select Health Care fund leans heavily on biotechnology, with companies like Eli Lilly, Regeneron, and Merck making up significant portions of its holdings.
While its expense ratio of 0.65% is higher than some peers, the fund has a long track record of steady performance, averaging a 9.8% annual return over the past decade.
Managed by Edward Yoon since 2008, FSPHX offers stability, solid returns, and a focus on biotech innovation, making it a reliable option for long-term healthcare investors.
Final Note
Healthcare ETFs offer a promising investment opportunity, especially with the sector’s continued innovation and the growing demand for healthcare services.
With advancements in biotechnology, AI, and global healthcare trends, these ETFs have the potential for long-term growth.
As you consider adding healthcare to your portfolio, make sure to choose wisely from the options we’ve highlighted to ensure the best possible return on your investment.