If you're interested in broad exposure to the Healthcare - Broad segment of the equity market, look no further than the Fidelity MSCI Health Care Index ETF (FHLC), a passively managed exchange traded fund launched on October 21, 2013.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 5, placing it in top 31%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $2.59 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. FHLC seeks to match the performance of the MSCI USA IMI Health Care Index before fees and expenses.
The MSCI USA IMI Health Care 25/50 Index represents the performance of the health care sector in the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.
It has a 12-month trailing dividend yield of 1.47%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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 Common Stock (LLY) accounts for about 11% of total assets, followed by Johnson + Johnson Common Stock Usd1.0 (JNJ) and Abbvie Inc Common Stock Usd.01 (ABBV).
The top 10 holdings account for about 48.94% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Health Care Index ETF has gained about 7.7% so far, and it's up approximately 0.75% over the last 12 months (as of 11/04/2025). FHLC has traded between $61.03 and $71.53 in this past 52-week period.
The ETF has a beta of 0.67 and standard deviation of 13.55% for the trailing three-year period, making it a medium risk choice in the space. With about 324 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Health Care Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FHLC is a sufficient option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Health Care ETF (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $15.91 billion in assets, Health Care Select Sector SPDR ETF has $36.52 billion. VHT has an expense ratio of 0.09%, 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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Fidelity MSCI Health Care Index ETF (FHLC): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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