Last updated: April 24, 2019

Overview

This sector includes companies that make drugs and equipment, provide health insurance, and manage facilities. This sector accounts for one-fifth of our GDP and is a critical component in all our lives.

We can break healthcare into several categories:

Drugs

This category includes biotech (Gilead), generic (Teva) and traditional drug companies such as Pfizer.

Medical equipment

This can range from small products like scalpels and bandages up to multi-million dollar x-ray equipment.

Medtronic (MDT), Cardinal Health (CAH), and Stryker (SYK) are some of the largest players in this market.

Managed Healthcare

These companies provide health insurance to the masses. I'm sure you've heard of few; especially if you pay for one of their policies. United Health (UNH), Aetna (ANTM), and Humana (HUM).

Ways to trade

(XLV) Healthcare Select Sector SPDR Fund

XLV Homepage

  • Total Assets: $18 billion
  • Div. Yield: 1.67%
  • Exp. Ratio: 0.13%
  • Options Available: Yes

(VHT) Vanguard Health Care ETF

VHT Homepage

  • Total Assets: $8. 6 billion
  • Div. Yield: 1.43%
  • Exp. Ratio: 0.10%
  • Options Available: Yes

(IHI) iShares U.S. Medical Devices ETF

IHI Homepage

Unlike the first two ETFs, this ETF focuses more on companies that manufacture medical devices.

  • Total Assets: $3.2 billion
  • Div. Yield: 0.29%
  • Exp. Ratio: 0.42%
  • Options Available: Yes

Top ten holdings

XLV (SPDR)

  1. Johnson & Johnson (JNJ)
  2. United Health (UNH)
  3. Pfizer (PFE)
  4. Merck & Co. (MRK)
  5. Abbot Laboratories (ABT)
  6. Abbvie Inc. (ABBV)
  7. Medtronic (MDT)
  8. Amgen (AMGN)
  9. Thermo Fisher Scientific (TMO)
  10. Eli Lilly (LLY)

VHT (Vanguard)

  1. Johnson & Johnson (JNJ)
  2. Pfizer (PFE)
  3. United Health (UNH)
  4. Merck & Co. (MRK)
  5. Abbot Laboratories (ABT)
  6. Medtronic (MDT)
  7. Abbvie Inc. (ABBV)
  8. Amgen (AMGN)
  9. Eli Lilly (LLY)
  10. Thermo Fisher Scientific (TMO)

IHI (iShares)

  1. Abbot Laboratories (ABT)
  2. Medtronic (MDT)
  3. Thermo Fisher Scientific (TMO)
  4. Danaher Corp (DHR)
  5. Edward Life Sciences (EW)
  6. Stryker Corp (SYK)
  7. Baxter International (BAX)
  8. Intuitive Surgical (ISRG)
  9. Becton Dickinson (BDX)
  10. Boston Scientific (BSX)

Buy, sell, or hold

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