UnitedHealth Lifts EPS Outlook Despite Mixed Q3 Results: ETFs in Focus

Shares of UnitedHealth Group Incorporated (UNH) ticked up 0.5% during the last trading session at the bourses, after it reported better-than-expected third-quarter 2025 earnings but missed the revenue estimate. Elevated medical and operating costs weighed on its year-over-year earnings performance.

Given the upbeat outlook for UNH’s 2025 earnings per share (EPS), investors may want to monitor exchange-traded funds (ETFs) with significant exposure to America’s largest health insurer. These include iShares U.S. Healthcare Providers ETF (IHF), Health Care Select Sector SPDR Fund (XLV), iShares U.S. Healthcare ETF (IYH), Vanguard Health Care ETF (VHT) and Fidelity MSCI Health Care Index ETF (FHLC).

But before diving into the specifics of these ETFs, let us do a detailed analysis of how UnitedHealth performed in the third quarter, in terms of other metrics.

A Brief Analysis of UNH’s Q3 Results

UnitedHealth’s third-quarter adjusted EPS of $2.92 beat the Zacks Consensus Estimate by 6.2%, while its revenues missed the consensus mark by 0.2%. On a year-over-year basis, the company delivered a mixed performance, although the trend was opposite this time. Its earnings declined 59.2%, while its revenues surged 12%.

The revenue performance was driven by UNH’s domestic membership expansion of over 780,000 lives year to date. Notably, the company concluded the third quarter with a total domestic membership of over 50 million.

UNH’s medical care ratio (MCR) of 89.9% improved 470 basis points (bps) from the year-ago period, on account of significantly elevated cost trends, as well as the ongoing effects of the Biden-era Medicare funding reductions.

Revenue growth was strong across business units, with UnitedHealthcare’s top line having surged 16% to $87.1 billion, while that for Optum went up 8% to $69.2 billion.

UNH exited the third quarter with cash and short-term investments of $30.6 billion, which rose from the 2024-end level of $29.1 billion. However, its operating cash flows of $18.6 billion in the first nine months of 2025 declined from the prior-year figure of $21.8 billion.

Looking ahead, UNH now expects to generate adjusted EPS of at least $16.25 for 2025, up from the previous guided figure of $16. The company also plans to resume share buybacks and strategic acquisition activities next year.

UNH-Heavy ETFs to Watch

iShares U.S. Healthcare Providers ETF (IHF)

This fund, with net assets worth $816.7 million, provides exposure to 62 U.S. companies that provide health insurance, diagnostics, and specialized treatment. Of these, UnitedHealth Group takes the first spot, accounting for a 22.17% share.

IHF has gained 7.2% year to date and charges 38 bps in fees.

Health Care Select Sector SPDR Fund (XLV)

This fund, with net assets worth $36.6 million, provides exposure to 60 companies from the pharmaceuticals; health care equipment and supplies; health care providers and services; biotechnology; life sciences tools and services; and health care technology industries. Of these, UnitedHealth Group takes the fourth spot, accounting for a 6.23% share.

XLV has gained 7.2% year to date and charges 8 bps in fees.

iShares U.S. Healthcare ETF (IYH)

This fund, with net assets worth $3.01 billion, provides exposure to 103 U.S. healthcare equipment and services, pharmaceuticals, and biotechnology companies. Of these, UnitedHealth Group takes the fourth spot, accounting for a 6.03% share.

IYH has surged 6.8% year to date and charges 38 bps in fees.

Vanguard Health Care ETF (VHT)

With net assets of $15.3 billion, this fund provides exposure to 398 companies engaged in health care equipment manufacturing, health care services, and the research, development, and marketing of pharmaceuticals and biotechnology products. Of these, UnitedHealth Group takes the third spot, accounting for a 4.94% share.

VHT has surged 8.4% year to date and charges 9 bps in fees.

Fidelity MSCI Health Care Index ETF (FHLC)

This fund, with net assets worth $2.50 billion, offers exposure to 323 companies that come from the healthcare sector in the U.S. equity market. Of these, UnitedHealth Group takes the fourth spot, accounting for a 5.39% share.

FHLC has surged 8.4% year to date and charges 8 bps in fees.

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This article originally published on Zacks Investment Research (zacks.com).

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