ETF Research and Analysis

by Robert Goldsborough
Suitability
First Trust Health Care AlphaDEX FXH should be treated as a complementary satellite holding to a diversified portfolio. This exchange-traded fund holds a portfolio of 76 healthcare stocks.
Unlike most passive funds, which   Read more 

Bull Case

This ETF offers much more of a mid-cap tilt than other healthcare ETFs. As such, it provides purer U.S. healthcare exposure than do some of its peers, whose holdings include large-cap pharmaceutical companies with meaningful overseas businesses.
Morningstar's equity analysts expect healthcare spending in China to grow meaningfully during the next five to 10 years as China ages and becomes richer.
Utilization rates have turned a corner and are rising slightly. Read more 

Bear Case

Healthcare stock prices, drug stocks in particular, can be very sensitive to the notion of increased governmental regulation of prices. Tackling the rising expense of health care is increasingly a priority for politicians, and if the government enacts new policies that reduce profitability across the healthcare sector, this ETF will suffer.
This ETF's expense ratio is relatively high for a sector ETF.
Relative to large market-cap-weighted healthcare ETFs, this fund has a large overweighting to the healthcare providers subsector. That may make this ETF less representative of the broader healthcare sector as a whole. Read more 

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