Launched on 01/26/2004, the Vanguard Health Care ETF (VHT) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $16.51 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. VHT seeks to match the performance of the MSCI US Investable Market Health Care 25/50 Index before fees and expenses.
The MSCI US Investable Market Health Care 25/50 Index is made up of stocks of U.S. companies within the health care sector.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.52%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Eli Lilly & Co (LLY) accounts for about 11.95% of total assets, followed by Unitedhealth Group Inc (UNH) and Abbvie Inc (ABBV).
Performance and Risk
Year-to-date, the Vanguard Health Care ETF has added about 4% so far, and is down about -1.34% over the last 12 months (as of 03/31/2025). VHT has traded between $250.81 and $288.10 in this past 52-week period.
The ETF has a beta of 0.70 and standard deviation of 14.16% for the trailing three-year period, making it a medium risk choice in the space. With about 413 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Health Care ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VHT is an excellent option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares Global Healthcare ETF (IXJ) tracks S&P Global 1200 Healthcare Sector Index and the Health Care Select Sector SPDR ETF (XLV) tracks Health Care Select Sector Index. IShares Global Healthcare ETF has $3.96 billion in assets, Health Care Select Sector SPDR ETF has $38.14 billion. IXJ has an expense ratio of 0.41% and XLV charges 0.08%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Health Care ETF (VHT): ETF Research Reports UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis Report Health Care Select Sector SPDR ETF (XLV): ETF Research Reports iShares Global Healthcare ETF (IXJ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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