What are the top life science ETFs? Here’s a look at the five best-performing life science ETFs of 2021.
Life science ETFs achieve this diversification by tracking a basket of biotechnology and pharmaceutical stocks in the healthcare sector under one umbrella. ETF managers often narrow down the focus of their offerings even further to follow a specific aspect of the market, and they typically adjust the weight of ETF holdings to match movements in the life science industry and give investors the best possible returns.
There are many options when it comes to life science ETFs, and to help investors understand their options, the Investing News Network has listed the top-performing life science ETFs over the past year.
Data was gathered on January 20, 2022, and the 10 life science ETFs listed by ETFdb.com were considered. Read on to learn more about the top-performing life science ETFs of 2021.
1. Health Care Select Sector SPDR Fund (ARCA:XLV)
Year-on-year performance: +13.4 percent
The Health Care Select Sector SPDR Fund has 66 holdings and its total assets are valued at US$34.65 billion. ETFdb.com describes the ETF as “one of the most popular options for gaining exposure to the U.S. health care sector,” and “an attractive option for investors looking to tilt exposure towards lower risk industries.”
This ETF focuses mainly on health technology and is dominated by major pharmaceutical companies. Its top holdings include firms such as Johnson & Johnson (NYSE:JNJ), Pfizer (NYSE:PFE) and AbbVie (NYSE:ABBV). In the last five years, this ETF has had a 100.4 percent investment return.
2. iShares US Healthcare ETF (ARCA:IYH)
Year-on-year performance: +9.3 percent
The iShares US Healthcare ETF was created in 2000, and offers investors exposure to the US healthcare sector, tracking biotech and pharma stocks. Its expense ratio is low at 0.43 percent, and its total assets stand at US$3.16 billion. In the last five years, this ETF has had a 101.1 percent investment return.
The ETF has 116 holdings of mainly large-cap companies, some of which mirror those of XLV. Others include UnitedHealth Group (NYSE:UNH), Abbott Laboratories (NYSE:ABT) and Thermo Fisher Scientific (NYSE:TMO).
3. iShares Global Healthcare ETF (ARCA:IXJ)
Year-on-year performance: +8.4 percent
The iShares Global Healthcare ETF offers investors exposure to life science companies on a global scale, but it is still dominated by US firms. Founded in 2001, the fund’s expense ratio is on par with IYH. In the last five years, the fund has had an investment return of 90.3 percent.
With 119 holdings, this ETF has total assets under management of US$3.5 billion. It is primarily focused on North American companies, although it has exposure to some international firms in Europe and Asia Pacific. Its top holdings include Johnson & Jonson, UnitedHealth Group and Pfizer.
4. iShares US Medical Devices ETF (ARCA:IHI)
Year-on-year performance: +7.9 percent
The iShares US Medical Devices ETF focuses on medical device companies, an often-overlooked segment of the life science market that has grown in recent years as advances in research and development bring innovation to the forefront. Its top holdings are Abbott Laboratories, Thermo Fisher Scientific and Medtronic (NYSE:MDT).
With 67 holdings, this ETF’s total assets under management are US$8.3 billion. In the last five years, it has brought a return of 162.5 percent for its shareholders.
5. Vanguard Health Care Index Fund ETF (ARCA:VHT)
Year-on-year performance: +5.9 percent
The Vanguard Health Care Index Fund ETF has the most holdings on this list at 445, including Johnson & Johnson, UnitedHealth Group and Pfizer. The ETF’s expense ratio is very low at 0.1 percent.
This is a broad fund with healthcare firms from varied industries. The total assets under management for this ETF are US$16.29 billion, and it has achieved a 103 percent increase for investors over the last five years.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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