Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Vanguard Health Care ETF VHT offers investors exposure to a high-quality portfolio of health-care companies, ranging from pharmaceuticals to medical devices. Given the sector's lack of sensitivity to the overall economic   Read more 

Bull Case

Among health-care ETFs, this fund is a strong choice. Its expense ratio is just 0.12%, and its portfolio is chock-full of high-quality, wide-moat firms.
Morningstar's equity analysts expect health-care spending in China to grow meaningfully during the next five to 10 years, as China ages and becomes richer.
The health-care sector could enjoy a secular tailwind propelled by the aging population. Read more 

Bear Case

Health-care stock prices, and 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.
This fund invests 53% of its assets in its top-10 holdings. Thus, the portfolio's risk and valuation are strongly influenced by just a handful of large-cap stocks.
The sector is slightly overvalued at this time. Read more 

Under the Hood of Multifactor Investing 
Watch more 

Premium Membership

View all of our analyst reports with a free trial to Premium.