Vanguard Health Care ETF vs iShares U.S. Healthcare ETF
VHT's 411 holdings and 0.09% expense ratio deliver identical 5-year returns to IYH's concentrated 100-stock portfolio, raising questions about whether lower costs justify broader diversification.
Vanguard Health Care ETF (VHT) and iShares U.S. Healthcare ETF (IYH) both invest in the U.S. healthcare sector, but VHT provides wider diversification at a lower cost. Both funds offer broad exposure to medical companies, but VHT's larger size and more affordable management style could lead to better long-term returns. Beta measures price volatility, with VHT showing less volatility than IYH.
Over the past year, VHT returned 1% more than IYH. Dividend yield is another factor, with VHT's 1.4% payout slightly outpacing IYH's 1.1%. VHT invests in 411 stocks, with the largest positions in Eli Lilly, Johnson & Johnson, and AbbVie. It was launched in 2004. IYH is more concentrated, holding 100 stocks, with the biggest holdings also being Eli Lilly, Johnson & Johnson, and AbbVie.
It launched in 2000. IYH's 1.1% dividend yield is lower than VHT's 1.4%. Both ETFs have their merits, but for most investors, VHT is the better choice due to its lower costs and broader exposure. IYH might suit those seeking a more concentrated portfolio of large healthcare companies and are comfortable with higher fees. While IYH's one-year return is marginally higher, past performance doesn't guarantee future results.
Ultimately, the decision depends on your long-term goals and risk tolerance. Consider your investment strategy carefully before choosing.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.