Top Healthcare ETFs Right Now

Invest in the best healthcare ETFs today with Interactive Brokers as your trusted online brokerage.

With an estimated $3 trillion spent on healthcare each year in the U.S. alone, you can invest in the industry and expect a profit. An exchange-traded fund (ETF) is an investment fund traded on stock exchanges. An ETF holds assets such as stocks, commodities or bonds. The best healthcare ETFs invest in a bundle of stocks from hospitals, pharmaceuticals, insurance agencies, medical equipment manufacturers and drug distributors. Take a look at the biggest gainers and losers on the market right now. 

Quick Look at the Best Healthcare ETFs:

• iShares U.S. Medical Devices ETF
• SPDR S&P Health Care Equipment ETF
• Invesco S&P SmallCap Health Care ETF

Top 3 Healthcare ETFs by AUM

Healthcare is a multi-billion-dollar industry and ETFs from this category are among the fastest-growing investments. You can find extensive coverage of large-cap companies, mid-cap companies and penny stocks listed under ETFs on the NYSE, NASDAQ and Morningstar.com. 

Before you begin trading these ETFs, compare expense ratios, historical performance, liquidity and the total assets under management (AUM). Based on these criteria, Benzinga recommends taking a look at the following ETFs.

1. iShares U.S. Medical Devices ETF (NYSEARCA: IHI)

iShares U.S. Medical Devices ETF has been listed on the stock exchange since 2006. It offers exposure to more than 57 companies — including medical device manufacturers — by tracking the Dow Jones U.S. Select Medical Equipment Index. 

The iShares U.S. Medical Devices ETF has AUM at $4.87 billion, and you can purchase its shares at a low expense ratio of 0.39%. An average of 497,651 thousand shares of this ETF are traded each day. iShares U.S. Medical Devices ETF has an 5-year return record of 7.4%. 

Historical performance of iShares U.S. Medical Devices ETF over the last 5 years. Source: NASDAQ

SPDR S&P Health Care Equipment ETF has been on the market since 2011. It tracks the S&P Health Care Equipment Select Industry Index and offers exposure to manufacturers of various medical equipment and supplies. A total number of 67 companies are listed under this ETF.

The ETF also has a low expense ratio of 0.35% with $223.5 million AUM. It has comparatively low liquidity with an average daily trade volume of 8,500 shares. You’ll also get a proven 5-year return record of 2.12%. 

Historical performance of SPDR S&P Health Care Equipment ETF over the last 5 years. Source: NASDAQ

Invesco S&P SmallCap Health Care ETF has been open for investing since 2010. You can gain exposure to more than 73 companies in the small-cap healthcare sector by tracking the S&P SmallCap 600 Health Care Index.

Invesco S&P SmallCap Health Care ETF has a total of $186.5 million AUM. You can buy shares of this ETF at a low expense ratio of 0.29% — more than 11,000 shares are traded each day. The Invesco S&P SmallCap Health Care ETF has a recorded 5-year return of 2.1%. 

Historical performance of Invesco S&P SmallCap Health Care ETF over the last 5 years. Source: NASDAQ

Best Online Brokers for Healthcare ETFs

You can find and trade the top ETFs on the stock market with an online broker — most offer commission-free trading. Here’s a rundown of the best online brokers to help you get started.  

1. You Invest by JP Morgan

Chase You Invest is an online broker with tools, expertise and insights from J.P. Morgan. You can open a You Invest Trade account with a $0 minimum deposit or a You Invest Portfolio account with a $500 minimum deposit.

You can trade unlimited stocks, ETFs and options at $0 commission. Trade on your own or have smart portfolios managed for you. Chase You Invest is regulated by the Financial Industry Regulatory Authority (FINRA).

2. Firstrade

Firstrade is a customizable online broker that lets you trade from your desktop, iPad or smartphone. You can open an account on Firstrade with a $0 minimum deposit. 

Firstrade offers more than 2,200 ETFs to trade at $0 commission. There are more than 100 ETF providers listed with details and access to Morningstar coverage. You can backtrack trades made prematurely with a $0 redemption fee. Firstrade is regulated by the SEC and FINRA. 

3. Charles Schwab

Charles Schwab is a popular online broker with an estimated 500,000 trades that take place each day. You can open an account on Charles Schwab with a $0 minimum deposit. Trade using its web or mobile application.  

Why Invest in Healthcare ETFs?

Here are the top 3 reasons you should consider investing in these ETFs.

1. Back medical advancements. Technology has transformed health care. Advances have introduced less invasive outpatient surgeries, telehealth doctor consultations and greater doctor-patient communication. Manufacturers also contribute with devices like smart health watches, heart rate monitors and other biosensors. 

ETFs allow you to invest in a pool of companies that manufacture wearable medical devices such as smart health watches, heart-rate monitors, blood pressure monitors and other biosensors.  

2. Less volatile. Unlike other businesses, the services provided by companies bundled in these ETFs are considered non-cyclical, which means they’re in constant demand. This demand helps maintain the daily stock prices of healthcare companies, regardless of the stock market’s condition.     

3. Safer investments during market crashes. Our perpetual need for medical care can help protect these ETFs against some economic crises and recessions. It’s not uncommon to see healthcare ETFs in the green even under extreme pressure. 

This means you could have a higher chance to buy or sell these ETF stocks when all your other stocks plummet. Healthcare investments can help you build a defensive portfolio.

Biggest Gainers and Losers

Here’s a quick look at healthcare ETFs on the market with the best profits and worst losses. 

Premarket Healthcare ETFs

Here’s a quick look at the premarket positions of healthcare ETFs to help you predict price movements during trading sessions. 

Aftermarket Healthcare ETFs

Here’s a quick look at the positions of healthcare ETFs after major stock exchanges are closed for trading.   

Get Top Healthcare ETFs for Your Portfolio

Healthcare ETFs can provide you with low-cost trades with promising long-term returns. Many ETFs from the healthcare sector also offer you optimistic annual dividend rates to further strengthen your financial portfolio. 

Frequently Asked Questions