Charles Shwab recently upgraded the sector to “outperform,” saying companies’ balance sheets are solid, dividend yields are attractive and after a mostly positive 2017, the year ahead is likely to bring continued strength. Demand is on the rise for healthcare products and services, and companies in this sector are flush with cash – all of which means better dividend yields and even stock buybacks that enhance shareholder value.
However, questions about the future of the Affordable Care Act and what might replace it are likely to keep the sector volatile over the year. So far, the sector has done well in early 2018, even as the Republican administration’s vow to “repeal and replace” the ACA has hit repeated roadblocks. (See also: Healthcare ETFs See Modestly Higher Valuations.)
With the sector turning in a strong performance despite the policy-related uncertainty, the first half of 2018 might be the perfect time to dip your toes into the healthcare market. Take a look at these top healthcare exchange-traded funds (ETFs) that could be ready to gain on a bullish market. Funds were chosen on a combination of 2017 and current year-to-date (YTD) performance – and assets under management. All figures were current as of Jan. 25.
- Issuer: State Street Global Advisors
- 2017 YTD Performance: 21.77%
- 2018 YTD Performance: 8.37%
- Net Assets: $16.52 billion
XLV tracks the healthcare stocks in the S&P 500, weighted by market cap. It is the oldest fund in this segment and by far the largest. As a reflection of the U.S. healthcare market, this fund is hard…