ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Nasdaq Portfolio Solutions Channel
  2. This Healthcare ETF Has Intriguing Prognosis
Nasdaq Portfolio Solutions Channel
Share

This Healthcare ETF Has Intriguing Prognosis

Tom LydonApr 04, 2022
2022-04-04

Broadly speaking, the healthcare sector isn’t on fire this year, but analysts are increasingly bullish on the group, citing attractive quality and valuation traits, among other factors.

While the sector isn’t yet ablaze in 2022, some big names in the group are delivering for investors, underscoring the point that quality is a virtue. On that note, some healthcare exchange traded funds have more significant exposure to high-flying names than others. That group includes the First Trust Health Care AlphaDEX Fund (FXH B).

FXH follows the StrataQuant® Health Care Index, which is a departure from the typical healthcare equity gauge. That could serve investors well in the current market setting.

“As inflation surges, geopolitical tensions mount, and the Fed begins to start a new cycle of interest rate increases, investors have begun to move back into healthcare stocks that are often seen as a haven during tough economic times.  As a result, AbbVie (ABBV), AmerisourceBergen (ABC), Anthem (ANTM), and UnitedHealth Group (UNH)  have all jumped back to record highs even though, as a group, they still trade at valuations below the S&P 500 Index,” according to Barchart.com.

In order, AbbVie, UnitedHealth, and Anthem combine for over 6% of the FXH roster. What makes the FXH methodology unique is that its underlying index employs both growth and value factors in its stock selection process. The implementation of a value overlay is highly relevant at a time when many analysts view healthcare as a credible value destination.

As just one example, Goldman Sachs sees attractive valuations in the sector and sees biotech and pharmaceuticals names as under-owned by professional investors.

The bank “sees room for the large-cap drugmakers to move higher toward their historical discount to the S&P 500 as investors move into discounted stocks like AbbVie, Bristol-Myers Squibb (BMY) and Merck (MRK),” adds Barchart.

Dow component Merck accounts for nearly 1% of the FXH portfolio. Owing to lethargy in the biotech space, small-cap healthcare names are trailing their large-cap counterparts on a year-to-date basis. As a result, it’s common for many sell-side analysts to extol the virtues of embracing larger healthcare stocks. The $1.46 billion FXH obliges, as the median market capitalization of the First Trust fund’s 85 holdings is $20.58 billion, according to issuer data.

For more news, information, and strategy, visit the Nasdaq Investment Intelligence Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X