Should You Invest in the Fidelity MSCI Health Care Index ETF (FHLC)?

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 10/21/2013.An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.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 2, placing it in top 13%.Index DetailsThe fund is sponsored by Fidelity. It has amassed assets over $2.65 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.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.50%.Sector Exposure and Top HoldingsETFs 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 10.55% of total assets, followed by Unitedhealth Group Inc Common Stock Usd.01 (UNH) and Johnson + Johnson Common Stock Usd1.0 (JNJ).The top 10 holdings account for about 49.24% of total assets under management.Performance and RiskThe ETF has added about 3.65% and was up about 4.62% so far this year and in the past one year (as of 12/24/2024), respectively. FHLC has traded between $64.09 and $74.23 during this last 52-week period.The ETF has a beta of 0.69 and standard deviation of 14.80% for the trailing three-year period, making it a medium risk choice in the space. With about 370 holdings, it effectively diversifies company-specific risk.AlternativesFidelity 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 good 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 $16.68 billion in assets, Health Care Select Sector SPDR ETF has $36.86 billion. VHT has an expense ratio of 0.10% and XLV charges 0.09%.Bottom LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fidelity MSCI Health Care Index ETF (FHLC): ETF Research Reports UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report Health Care Select Sector SPDR ETF (XLV): ETF Research Reports Vanguard Health Care ETF (VHT): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks