Fidelity MSCI Health Care Index ETF: A Fund that Tracks the Healthcare Industry.

The Fidelity MSCI Health Care Index ETF (FHLC) is a passive ETF that invests in the healthcare industry. Its performance is average compared to industry peers, but it has some unique features that investors should consider.

The Fidelity MSCI Health Care Index ETF (FHLC) is a passive ETF that invests in the healthcare industry. While its performance is average compared to industry peers, it offers several unique features that investors should consider. Launched on October 21, 2013, FHLC is based on the MSCI US IMI 25/50 Health Care index and is issued by Fidelity. It tracks a market-cap-weighted index of U.S. healthcare stocks, providing broad exposure to the sector.

One of the notable features of FHLC is its diversification. The fund holds 368 U.S. large-cap healthcare stocks, with the top 10 holdings accounting for 47.75% of its assets. This diversification helps to mitigate risk, as the fund is not overly concentrated in any single company or subsector. The top 10 holdings include Eli Lilly and Company (LLY), Johnson & Johnson (JNJ), and UnitedHealth Group Incorporated (UNH), among others [1].

FHLC also offers a competitive expense ratio of 0.084%, which is reasonable compared to its peers. This makes it an attractive option for investors seeking low-cost exposure to the healthcare sector. Additionally, the fund has a strong dividend history, with quarterly payouts ranging from $0.238 to $0.258 per share over the past year [1].

Despite its average performance, FHLC has some unique advantages. For instance, it has a lower expense ratio and better performance than the Healthcare Select Sector SPDR Fund ETF (XLV). Furthermore, the fund has a strong track record of delivering solid returns, with an average annual return of 9.76% since its inception [1].

However, it's essential to consider the fund's concentration on large-cap stocks. While this provides diversification within the sector, it may limit exposure to smaller-cap healthcare companies. Additionally, the fund's performance may be more sensitive to changes in the economy, as large-cap stocks tend to be more cyclical.

In conclusion, the Fidelity MSCI Health Care Index ETF (FHLC) offers a well-diversified, low-cost exposure to the healthcare sector. While its performance is average compared to industry peers, its unique features make it an attractive option for investors seeking broad exposure to the sector. As always, investors should carefully consider their risk tolerance and investment goals before making any investment decisions.

References:
[1] https://stockanalysis.com/etf/fhlc/
[2] https://seekingalpha.com/article/4800703-fhlc-an-average-healthcare-etf