Healthcare stocks have been volatile over the past few years. The sector is rife with both winners and losers.
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Health insurers such as Humana (HUM) and UnitedHealth (UNH) have gotten beaten down as the U.S. government caps reimbursements and Medicare payments. On the flipside, pharmaceutical stocks such as Eli Lilly (LLY) are soaring on the promise of breakthrough medications like weight-loss drugs.
Rather than trying to pick individual winners and losers in the healthcare space, it would be smarter to buy a healthcare exchange-traded fund (ETF) that offers broad exposure to the sector without the risks found with individual stock picks.
Specialty Healthcare ETFs
There are currently a number of specialty ETFs within healthcare that can give investors broad-based exposure to certain aspects of this dynamic sector. These include the iShares Nasdaq Biotechnology ETF (IBB) that tracks Nasdaq-listed biotechnology firms.
There is also the SPDR S&P Biotech ETF (XBI) that focuses more on smaller-cap biotech companies, offering a different risk/reward setup. And to get even more specialized, there is the iShares U.S. Medical Devices ETF (IHI) that provides exposure to a variety of medical device makers.
Comparing Healthcare ETFs
Below is a chart comparing the three healthcare ETFs discussed in this article. As one can see, each of the three ETFs is highly rated and offers a dividend to shareholders as well.
