The range of exchange traded funds (ETFs) available to investors today is incredible. ETFs for indices, sectors, themes, and about any other relevant financial metric are now available. In this article, I'm going to discuss the benefits of investing in one specific ETF tracking the health care sector.
The iShares Global Healthcare ETF (TSX:XHC) is a great way for investors seeking exposure to the strong long-term growth undercurrent beneath the U.S. health-care sector. This fund provides excellent diversification, allowing investors to spend their bets across a wide range of companies to reduce the idiosyncratic risk of any one company.
The fund also has an incredibly attractive fee, suitable for long-term, passive investors not willing to actively buy and sell securities or re-balance accordingly.
The big driver I see for this ETF is a sharp reduction in political risk in the near term. Every election year, the health-care sector tends to get bandied about as a political bargaining chip, and investor concerns around health-care reform have never been higher, up until recently, with the threat of a Bernie Sanders presidency now a thing of the past.
With the likelihood of disruption in this sector significantly diminished, investors can confidently shift their focus away from near term hurdles toward the long-term, which is bright. This is one high-quality growth ETF for those willing to add some risk to their portfolio today.
Invest wisely, my friends.
