Healthcare remains one of the most recession-resistant sectors in the market. Regardless of what’s going on with the rest of the market, people need medical care and prescription drugs. If you’re seeking stability and long-term growth potential, healthcare ETFs offer diversified exposure to the industry. Here are three of the most resilient healthcare ETFs worth considering.
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Vanguard Health Care ETF (VHT +0.27%)
By tracking a broad benchmark of healthcare stocks, VHT ranks among the best ETFs for long-term growth. The fund offers broad exposure to the healthcare sector, including pharmaceuticals, medical equipment, biotechnology, and managed care.
What makes VHT attractive
- Low expense ratio: Vanguard’s trademark low-cost structure (currently at 0.09%) makes VHT an economical choice for long-term investors.
- Diversification: Includes healthcare industry giants like Eli Lilly, Johnson & Johnson, and AbbVie.
- Comprehensive holdings: VHT seeks to capture growth across multiple subsectors.
- Proven track record: The fund has a historical record of solid long-term growth.
VHT may be an ideal addition to your portfolio if you’re looking for core healthcare exposure without having to pick out individual healthcare stocks.
iShares U.S. Medical Devices ETF (IHI +1.23%)
If you’re planning for retirement and looking for growth potential, IHI may be precisely what you’re looking for. IHI offers targeted exposure to one of healthcare’s most innovative sectors. The medical device sector is likely to expand dramatically over the next decade, driven by aging demographics and rapid technological advancements. Add to that an ongoing shift toward minimally invasive procedures, and medical devices appear poised for growth.
What makes IHI attractive
- Focus on innovation: Given that most medical device companies invest heavily in R&D, it’s a fair bet that product improvements will boost the overall value of this ETF.
- Demographics: As the global population ages, demand for joint replacements, diagnostic equipment, and cardiac devices will increase.
- Healthy margins: Medical device manufacturers typically maintain robust profit margins and can set their own prices.
- Holdings: IHI features leaders in the medical device space, including Intuitive Surgical, Abbott Laboratories, and Stryker.
With an expense ratio of 0.38%, IHI may be right for you if you want exposure to medical innovation without the risk of biotech stocks.
Global X HealthTech ETF (HEAL +0.59%)
A decade ago, it was rare to hear of someone “visiting” their doctor from the comfort of home. Today, HEAL represents the future of healthcare delivery as telehealth platforms, health data analytics, and remote patient monitoring become the norm. HEAL captures that digital transformation.
What makes HEAL attractive
- Growth trend: Digital health continues to expand after accelerated growth during the pandemic.
- Global exposure: HEAL includes both U.S. and international digital health companies.
- Holdings: HEAL’s top holdings include Oscar Health, Iqvia, and Dexcom.
HEAL, with its expense ratio of 0.50%, may be right for you if you want to capitalize on healthcare’s digital expansion.
These ETFs bank on the fact that medical care will always be a necessity, and the belief that innovations in healthcare will continue to propel growth.
Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, Eli Lilly, Intuitive Surgical, and Iqvia Holdings. The Motley Fool recommends DexCom and Johnson & Johnson and recommends the following options: long January 2027 $65 calls on DexCom, long January 2028 $520 calls on Intuitive Surgical, short January 2027 $75 calls on DexCom, and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.