Another quarter and another superb performance from pharmaceutical giant Johnson & Johnson (NYSE:JNJ). For the most part, healthcare ETFs have been performing in-line with the markets. Investors looking to avoid volatility tend to gravitate toward the big pharma plays.
The spate of pending mergers in the HMO space are also pushing the performance of some ETFs as well. One thing we can’t overlook though is this is a Presidential election year and drug prices tend to creep into the debate as candidates promise the world to voters. Biotech ETFs especially have felt the crush of potential drug price curbs.
While the big ETF plays in Healthcare/Biotech may not be getting the 20%-plus returns of what Johnson & Johnson has already in 2016, a sense of optimism may soon be warranted for these particular ETFs:
– S&P 500 HealthCare Sector SPDR (NYSE:XLV) is up 3.22% YTD and has a dividend yield of 1.82%
– Vanguard HealthCare ETF (NYSE:VHT) is up 2.42% YTD and has a dividend yield of 1.27%
– iShares Dow Jones U.S. HealthCare Index Fund ETF (NYSE:IYH) is up 1.92% YTD and has a dividend yield of 2.35%