Healthcare

ETF Talk: IYH — All Healthcare, All the Time

To Wonder Medical Disease Progress Care For Clinic

“The greatest wealth is health.”

— Virgil, ancient Roman poet

Healthcare is an area of the human experience that every American is highly attuned to receiving.

When it comes to the treatment of ourselves and our loved ones, we dedicate time towards researching and selecting the method of treatment that is best for us. Investing in the healthcare sector is no different.

There are a wide variety of ETFs to choose from, so it is imperative that investors find the fund that is right for them. When choosing a doctor or other healthcare provider, it’s important to weigh cost, flexibility and other factors. The same can be said of choosing a fund or investing.

Today’s ETF is cheap, flexible and allows for access to top healthcare holdings.

iShares U.S. Healthcare ETF (IYH) is a passively managed exchange-traded fund (ETF). Sponsored by Blackrock, it is one of the largest ETFs in the Healthcare broad segment of the equity market.

The fund is designed to offer wide exposure to the healthcare market. It seeks to match the performance of the Dow Jones U.S. Healthcare Sector Index and Russell 1000 Healthcare Sector Index.

As a passively managed ETF, the fund boasts lower costs, flexibility and tax efficiency. It is ideal for those looking for a long-term investment. Its expense ratio of 0.39% makes IYH one of the cheapest funds on the market.

IYH traded between $53.35 and $66.59 this year. It has 105 holdings, all of which are exclusively companies in the healthcare sector.

The fund has net assets of $2.73 billion and a yield of 1.39%. It has an expense ratio of 0.39%. The fund is down 2.91% over the last month, down 6.14% over the last three months and down 11.55% for the year to date.

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The top 10 holdings account for about 53.47% of the portfolio’s assets and include Eli Lilly and Company (12.06%), Johnson & Johnson (8.06%), AbbVie Inc. (6.81%), UnitedHealth Group Incorporated (4.62%), Abbott Laboratories (4.44%), Merck and Co, Inc. (4%), ThermoFisher Scientific Inc. (3.59%), Intuitive Surgical Inc. (3.49%), Amgen Inc. (3.23%) and Boston Scientific Corporation (3.15%).

Chart courtesy of www.stockcharts.com.

The fund is not diversified, meaning all of its holdings are concentrated in one sector: healthcare. The performance of the fund is dependent on the fluctuations of that sector.

Luckily, healthcare has been historically stable in the United States, so investing in a non-diverse fund like IYH could allow investors to ride a wave of profits as the market succeeds.

However, don’t just take my word for it. Investors should always do their due diligence before adding any stock, fund or ETF to a portfolio.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.