Q: I have ZUH and VHT in my portfolios to cover U.S. healthcare. They are both stagnant over the past 4 years with low yields. Time to sell? How will they be impacted by the U.S. election?
Thanks.
Thanks.
5i Research Answer:
Both ETFs hold mostly large healthcare names within the US universe, and are largely just following the broader US healthcare sector. The healthcare sector has historically been a source for stable returns with minimal volatility and a good level of defensiveness. Although, over the past few years the healthcare sector has lagged somewhat, but we continue to like the sector as having the potential for both attractive returns and minimal volatility.
We would be comfortable holding these ETFs with the potential for sector rotation in the coming year(s). The US election can create pockets of strength for some industries, and we feel that the healthcare sector could be one of those pockets.