Considering how inflationary concerns continue to rattle the minds of investors, one would assume healthcare stocks could see a resurgence.
Traditionally, that sector has been viewed as a potential bastion against inflationary pressures. This is due in part to the essential nature of many healthcare companies. Even if prices are high, folks will still pay for healthcare expenses to handle medical needs.
As such, this sector’s stocks could work as both a portfolio diversifier and hedge against inflation. However, a recent article from American Century Investments explores why pharmaceutical companies could be adversely affected by ongoing tariff negotiations.
In the article, the American Century team noted that many pharmaceutical firms have moved their drug manufacturing operations offshore. While offshore operations may have provided cheaper labor and manufacturing costs, these firms now remain particularly exposed to pharma tariffs from the U.S. government.
“The exact impact of any pharmaceutical tariffs will be hard to assess until the Trump administration releases its plans,” the American Century team added. “Because there are so many moving parts, we continue monitoring government policy developments and companies’ responses. However, we think pharma firms could experience higher costs and impaired earnings.”
This uncertain outlook for pharma companies may make it harder to justify staying engaged with the healthcare sector. However, the flexible ETF wrapper can offer a multitude of ways to maintain one’s healthcare exposure.
How MID Offers Managed Healthcare Exposure
One fund that could offer a compelling solution to healthcare sector investing is the American Century Mid Cap Growth Impact ETF (MID ). Its goal is to invest in a selection of midcap companies with a focus on long-term growth and sustainability.
How MID operates as a healthcare play comes from the fund’s sector weightings. As of May 31, 2025, the fund holds 15% of its portfolio in healthcare stocks. This helps MID tap into the benefits of healthcare companies, while offering enough diversification to mitigate volatility in that sector.
As an additional risk management perk, MID is an active ETF. Through the active ETF wrapper, MID can readjust its healthcare exposure if the sector sees significant outperformance or underperformance.
Like the American Century article noted, it’s still far too early to tell how tariffs will affect pharmaceutical stocks. Regardless of the outcome, investors can continue to turn to active ETFs to find solutions for diversified sector exposure.
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