Healthcare Stocks Back in Radar!

As we are seeing the treasury yield rise as well as increase in oil price, these past 2 days, we are seeing healthcare stocks among the top gainers.

I would be more interested to look at ETFs which cover a broad healthcare sector. In this article, I will be sharing two healthcare ETFs which I find that to be investable.

Firstly is the low expense ratio and secondly, they have been growing despite whether there is a decline or increase the U.S. Treasury 10-Year yield.

The reason why I am using the 10-Year yield as comparison, because this is one of the good indicators I feel that will roughly tell us how the interest rate would move.

Here is a summary of the two healthcare ETFs

As I observed, it look like XLV ETF have begin to rise inversely as to Treasury yield, when treasury yield went down, XLV continue to rise.

From 2018 onwards, it seems like XLV rose whether treasury yield drop or rise, and the advantage of investing in XLV is its low expense ratio.

Imagine if you have invested in 2018, it has rose more than 20% since then.

From 2016, VHT have been rising despite movement in treasury yield drop or rise. What does it actually mean, this would be a good defensive strategy against any market fluctuation due to monetary policy to curb inflation.

As we can see from the chart below, since 2016, it has been on an uptrend. With a low expense ratio. I would personally believe this ETF is worth to be placed in our portfolio.

When investing in healthcare stocks, there are some benefits that we might consider, investing in an ETF that cover broad healthcare allow us to have these advantage.

Consistent Demand: Healthcare is a fundamental and enduring industry. People will always need medical treatments, drugs, and therapies, making it a stable and growing sector. This consistent demand can translate into steady revenue streams for pharmaceutical and biotech companies.

Global Expansion: Many pharmaceutical and biotech companies operate globally, allowing them to tap into emerging markets with growing healthcare needs. Expanding into new regions can contribute to revenue growth and stock price appreciation.

Diversification: Investing in pharmaceuticals, therapeutics, and biosciences can provide diversification to an investment portfolio. These stocks may not always move in the same direction as other sectors, offering potential risk mitigation during market downturns.

Defensive Qualities: Healthcare stocks are often considered defensive investments because they tend to perform well even in economic downturns. People prioritize their health and well-being, which can make healthcare stocks more resilient in challenging economic conditions.

With these consideration, I am adding these 2 ETFs into my portfolios for long term.

Appreciate if you could share your thoughts in the comment section whether you think it is good time to look at some potential good healthcare ETFs.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.