5 Best Healthcare ETFs To Buy Now

In this article, we discuss 5 best healthcare ETFs to buy now. If you want to read our discussion on the healthcare industry, head over to 11 Best Healthcare ETFs To Buy Now. 

5. Vanguard Health Care Index Fund ETF Shares (NYSE:VHT)

5-year Share Price Performance as of March 19: 55.83%

Vanguard Health Care Index Fund ETF Shares (NYSE:VHT) aims to mirror the performance of the Spliced U.S. Investable Market Health Care 25/50 Index, which measures the investment return of stocks in the health care sector. The ETF utilizes a passive management approach, employing a full-replication strategy when possible and a sampling strategy when regulatory constraints dictate. As of February 29, 2024, Vanguard Health Care Index Fund ETF Shares (NYSE:VHT)’s expense ratio is 0.10%, with net assets totaling $20.8 billion and a portfolio comprising 414 stocks. Vanguard Health Care Index Fund ETF Shares (NYSE:VHT) is one of the best healthcare stocks to buy.

AbbVie Inc. (NYSE:ABBV) is one of the top holdings of Vanguard Health Care Index Fund ETF Shares (NYSE:VHT). On February 15, AbbVie Inc. (NYSE:ABBV) declared a $1.55 per share quarterly dividend, in line with previous. The dividend is distributable on May 15, to shareholders on record as of April 15. 

According to Insider Monkey’s fourth quarter database, 76 hedge funds were bullish on AbbVie Inc. (NYSE:ABBV), compared to 73 funds in the last quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a prominent stakeholder of the company, with 3.17 million shares worth nearly $492 million. 

4. iShares U.S. Healthcare Providers ETF (NYSE:IHF)

5-year Share Price Performance as of March 19: 57.06%

iShares U.S. Healthcare Providers ETF (NYSE:IHF) ranks 4th on our list of the best healthcare ETFs. iShares U.S. Healthcare Providers ETF (NYSE:IHF) aims to replicate the performance of the Dow Jones U.S. Select Healthcare Providers Index, consisting of U.S. equities in the healthcare providers sector. It offers exposure to companies in the United States providing health insurance, diagnostics, and specialized treatment. As of March 18, 2024, iShares U.S. Healthcare Providers ETF (NYSE:IHF) holds net assets totaling $836 million with an expense ratio of 0.40%. Its portfolio consists of 67 stocks. 

Elevance Health, Inc. (NYSE:ELV) is one of the top holdings of the iShares U.S. Healthcare Providers ETF (NYSE:IHF). Elevance Health, Inc. (NYSE:ELV) is a health benefits company operating in the United States through four segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other. On January 30, the company declared a quarterly dividend of $1.63 per share quarterly dividend, a 10.1% increase from its prior dividend of $1.48. The dividend is payable on March 22, to shareholders on record as of March 8. 

According to Insider Monkey’s fourth quarter database, 83 hedge funds were bullish on Elevance Health, Inc. (NYSE:ELV), same as the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the leading stakeholder of the company, with 1.7 million shares worth $838.6 million. 

ClearBridge Large Cap Value Strategy made the following comment about Elevance Health, Inc. (NYSE:ELV) in its Q3 2023 investor letter:

“Our health care positioning also fared well. We continue to maintain an overweight position to managed care companies via long-term holdings in UnitedHealth and Elevance Health, Inc. (NYSE:ELV), as we believe the short cycle nature of their insurance franchises allows them to reprice their book of business in a relatively short time frame, even if health care costs come in higher than previously anticipated.”

3. iShares U.S. Healthcare ETF (NYSE:IYH)

5-year Share Price Performance as of March 19: 59.06%

iShares U.S. Healthcare ETF (NYSE:IYH) aims to replicate the performance of the Russell 1000 Health Care RIC 22.5/45 Capped Gross Index, which provides exposure to healthcare equipment and services, pharmaceuticals, and biotechnology companies in the United States. As of March 18, 2024, the ETF holds nearly $3.5 billion in net assets, with an expense ratio of 0.40%, and a portfolio consisting of 112 stocks. iShares U.S. Healthcare ETF (NYSE:IYH) ranks 3rd on our list of the best healthcare ETFs. 

Thermo Fisher Scientific Inc. (NYSE:TMO) is one of the largest holdings of the iShares U.S. Healthcare ETF (NYSE:IYH). Thermo Fisher is a global provider of life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and services. On February 21, Thermo Fisher Scientific Inc. (NYSE:TMO) declared a $0.39 per share quarterly dividend, an 11.4% increase from its prior dividend of $0.35. The dividend is payable on April 15, to shareholders on record as of March 15. 

According to Insider Monkey’s fourth quarter database, 111 hedge funds were bullish on Thermo Fisher Scientific Inc. (NYSE:TMO), compared to 109 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the leading stakeholder of the company, with 3.14 million shares worth $1.67 billion. 

Weitz Partners III Opportunity Fund made the following comment about Thermo Fisher Scientific Inc. (NYSE:TMO) in its second quarter 2023 investor letter:

“Portfolio activity this quarter included opportunistically initiating a position in life sciences tool and equipment maker Thermo Fisher Scientific Inc. (NYSE:TMO), a long-time holding of other Weitz portfolios, at an attractive valuation.”

2. Health Care Select Sector SPDR Fund (NYSE:XLV)

5-year Share Price Performance as of March 19: 59.81%

Health Care Select Sector SPDR Fund (NYSE:XLV) aims to match the performance of the Health Care Select Sector Index. This index represents the health care sector of the S&P 500 Index and includes companies from pharmaceuticals, health care equipment and supplies, health care providers and services, biotechnology, life sciences tools and services, and health care technology industries. The ETF features an expense ratio of 0.09% as of March 19, 2024, with a portfolio comprising 64 stocks. Its assets under management as of the same date totaled $40,644.38 million. Health Care Select Sector SPDR Fund (NYSE:XLV) is one of the best healthcare ETFs to buy. 

Danaher Corporation (NYSE:DHR) is one of the top holdings of Health Care Select Sector SPDR Fund (NYSE:XLV). Danaher designs, manufactures, and markets professional, medical, industrial, and commercial products and services. It operates through Biotechnology, Life Sciences, and Diagnostics segments. On February 22, Danaher Corporation (NYSE:DHR) declared a $0.27 per share quarterly dividend, a 12.5% increase from its prior dividend of $0.24. The dividend is payable on April 26, to shareholders on record as of March 28. 

According to Insider Monkey’s fourth quarter database, Danaher Corporation (NYSE:DHR) was part of 90 hedge fund portfolios, compared to 103 in the last quarter. 

Headwaters Capital Management stated the following regarding Danaher Corporation (NYSE:DHR) in its fourth quarter 2023 investor letter:

“Danaher Corporation’s (NYSE:DHR) acquisition offer for ABCM was approved by shareholders on 11/6/23. Shareholders approved the deal based on trough fundamentals (potential China weakness) and trough valuation (the broader market bottomed on 10/27). DHR took advantage of broader market fears and mis-aligned management incentives to acquire Abcam at a cheap price. While disappointing, ABCM was still a very successful investment for Headwaters as it outperformed the market by +27% during our ownership. The cash received from the acquisition was immediately re-deployed into the newest addition to the portfolio, IPAR (discussed below).”

1. Invesco S&P 500 Equal Weight Health Care ETF (NYSE:RSPH)

5-year Share Price Performance as of March 19: 59.94%

Invesco S&P 500 Equal Weight Health Care ETF (NYSE:RSPH) tracks the S&P 500 Equal Weight Health Care Index, which equally weights stocks in the healthcare sector of the S&P 500. The fund and index are rebalanced quarterly. Launched on November 1, 2006, the ETF features an expense ratio of 0.40% and holds a portfolio of 66 stocks as of March 18, 2024. Invesco S&P 500 Equal Weight Health Care ETF (NYSE:RSPH) is one of the best stocks to buy. 

West Pharmaceutical Services, Inc. (NYSE:WST) is the largest holding of the Invesco S&P 500 Equal Weight Health Care ETF (NYSE:RSPH). West Pharmaceutical Services, Inc. (NYSE:WST) specializes in designing, manufacturing, and selling containment and delivery systems for injectable drugs and healthcare products globally. On February 20, the company declared a $0.20 per share quarterly dividend, in line with previous. The dividend is payable on May 1, to shareholders on record as of April 24. 

According to Insider Monkey’s fourth quarter database, 42 hedge funds were long West Pharmaceutical Services, Inc. (NYSE:WST), same as the prior quarter. 

Conestoga Capital Advisors SMid Cap Strategy stated the following regarding West Pharmaceutical Services, Inc. (NYSE:WST) in its fourth quarter 2023 investor letter:

“West Pharmaceutical Services, Inc. (NYSE:WST)): WST, a market leader in containment and delivery solutions for the pharmaceutical industry, posted a strong 2023 but gave back some gains during the fourth quarter. During their third quarter call, WST reduced full-year revenue guidance as restocking in its Pharmaceutical and Generics end markets have slowed below expectations. Despite the reduction, ex-COVID revenues continue to grow double-digits and WST reiterated their expectation for 7-9% organic growth in 2024 with 100 basis points of margin expansion, in line with their long-term model.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 12 Best Bond ETFs To Buy and 11 Best Dividend ETFs To Buy.