ETF Research and Analysis

by Robert Goldsborough
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 health-care stocks.
Unlike most passive funds, which   Read more 

Bull Case

This ETF offers much more of a mid-cap tilt than other health-care ETFs. As such, we believe it provides purer exposure to the U.S. health-care sector than do some of its peers, whose holdings include large-cap pharmaceutical companies with meaningful overseas businesses.
Our equity analysts expect health-care 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, although they still haven't reached the levels where they were in 2007. Read more 

Bear Case

Health-care 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 health-care sector, this ETF will suffer.
The sector is slightly overvalued at this time.
This ETF's expense ratio is relatively high for a sector ETF. Read more 

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