The fund offers you exposure to 100 premium health-care stocks spread around the globe with a special emphasis on the U.S., Switzerland, Japan, the U.K. and Germany.
That focus lets investors tap into the global health-care response to the Covid-19 pandemic. The possibility one of the fund’s holdings could also play a key role in developing a vaccine or medical treatment for the virus further enhances its appeal.
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ISHARES GLOBAL HEALTHCARE ETF (New York symbol IXJ) lets you invest in companies that are part of the health-care sector. The portfolio represents all the key fields of health care including consumer, pharmaceuticals, biotechnology, medical devices, and health insurance. You could also opt for an identical Canadian-listed version of the ETF (Toronto symbol XHC). Note, however, that it charges investors a higher MER than the U.S.-listed version.
Either way, you gain exposure to a fund with a strong global focus. Still, its largest allocation is to the U.S. (68.0%). That’s followed by Switzerland (10.7%), Japan (6.3%), the U.K. (5.1%), and Germany (2.4%).
Through their units in the ETF, investors hold about 100 companies; the top 10 make up 40% of total assets. They include Johnson & Johnson (U.S.; diversified healthcare, 6.9%), UnitedHealth (U.S.; health insurance, 5.0%), Roche (Switzerland; pharmaceuticals, 4.3%), Novartis (Switzerland; pharma, 4.3%), and Merck (U.S.; pharmaceuticals, 3.7%).
ETFs Stocks: Large asset base and strong liquidity add to safety
The fund launched in November 2001, and its MER is a reasonable 0.46%. (The MER of the Canadian version is a high 0.65%). The ETF has a large asset base, and the average $8.9 million in daily trading provides ETF investors with the kind of strong liquidity we look for.
The average p/e of the portfolio’s stocks is 16.6. The ETF pays a fluctuating twice-yearly dividend. Over the past 12 months, investors received $0.98 for a yield of 1.6%.
The fund gained 4.8% over the last year, while the MSCI World Equity Index rose 0.7%. Over the past five years, the ETF returned 30.8%, just below 33.8% for the global index.
The Tekla funds HQH and HQL invest in healthcare and life sciences, respectively. Both have a roughly 10% yield and are currently trading under net asset value (NAV), so there is an opportunity for capital appreciation in addition to the 10% dividend yield.
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The Tekla funds HQH and HQL invest in healthcare and life sciences, respectively. Both have a roughly 10% yield and are currently trading under net asset value (NAV), so there is an opportunity for capital appreciation in addition to the 10% dividend yield.
Thanks for your opinion on these two ETFs.