Looking for ETFs with a strong case for upside this year? With many investors wary of concentration risk, now could be the time to diversify into other exciting areas. Health care technology, for example, benefits from advances in A.I. without as much exposure to those megacap tech names. Valuations in health care have actually lagged for some time, presenting a potential opportunity via health care technology ETF HTEC.
The ROBO Global Healthcare Technology and Innovation ETF (HTEC ), launched in 2019. Charging 68 basis points, the strategy invests in a proprietary index of global health care tech firms. The health care technology ETF includes firms operating in areas like regenerative medicine, lab process automation, telehealth, and more. That approach has helped HTEC get off to a strong start in 2025. According to YCharts data, HTEC has returned 8.49% YTD as of January 28.
What might be driving that performance, and can it continue further into 2025? For one thing, a number of uncertainties looming over the space have since cleared. Labor shortages and supply chain issues, perhaps left over from the pandemic, have ebbed. At the same time, the high interest rate environment may have previously held health care tech firms back. Pharma companies, in particular, rely heavily on loans to get started, waiting for drugs to get through FDA trials.
What’s more, clarity from the new administration on health care rules and regulations will empower firms to invest and grow. Investors may have noted a shift in tone at this month’s health care conference, hosted by J.P. Morgan. That event saw previous tones of caution replaced by optimism in new product updates, launches, and general possibility. While anecdotal, that may suggest some degree of positivity as flavor for the overall case in health care technology.
As new advances like name brand semaglutides shake up health care, and with more on the way, health care tech could provide a strong opportunity area. HTEC has started 2025 strong, and with the lagging impact of rate cuts perhaps still unfolding, too, the health care technology ETF may offer a compelling case.
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VettaFi LLC (“VettaFi”) is the index provider for HTEC for which it receives an index licensing fee. However, HTEC is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of HTEC.
