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BMO Equal Weight US Health Care Hedged to CAD Index ETF (ZUH)
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iShares U.S. Medical Devices ETF (IHI)
Q: Would like to hear your opinion of 2 health care sector ETFs, IHI for medical devices, and ZUH for general health care. The IHI has outperformed the ZUH. Would you hold both, or sell the ZUH and put the proceeds into an increased position in IHI?
5i Research Answer:
We think both are fine for healthcare exposure in general. The sector has been hit recently with concern over Trump policies and the appointment of RFK. IHI has a five year annualized return of 7.47%, fees of 0.40% and indicated yield of 1.24%. ZUH is 3.49%, 0.39%, 0.75%. Note that the underperformance of ZUH is mostly due to its currency hedge. The C$ has been very weak and it has thus not benefited from this. We would prefer IHI. Devices may not be in the target of the Republicans as much as drugs.