Should You Invest in the Fidelity MSCI Health Care Index ETF (FHLC)?

Launched on October 21, 2013, the Fidelity MSCI Health Care Index ETF (FHLC) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Broad segment of the equity market.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $2.91 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. FHLC seeks to match the performance of the MSCI USA IMI Health Care Index before fees and expenses.

The MSCI USA IMI Health Care 25/50 Index represents the performance of the health care sector in the U.S. equity market.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.

It has a 12-month trailing dividend yield of 1.41%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.

Looking at individual holdings, Eli Lilly + Co Common Stock (LLY) accounts for about 12.72% of total assets, followed by Johnson + Johnson Common Stock Usd1.0 (JNJ) and Abbvie Inc Common Stock Usd.01 (ABBV).

The top 10 holdings account for about 49.8% of total assets under management.

Performance and Risk

So far this year, FHLC has lost about 0.77%, and it's up approximately 6.78% in the last one year (as of 03/10/2026). During this past 52-week period, the fund has traded between $61.03 and $76.72.

The ETF has a beta of 0.65 and standard deviation of 13.49% for the trailing three-year period, making it a medium risk choice in the space. With about 333 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity MSCI Health Care Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FHLC is a reasonable option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Health Care ETF (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the State Street Health Care Select Sector SPDR ETF ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $17.05 billion in assets, State Street Health Care Select Sector SPDR ETF ETF has $40.98 billion. VHT has an expense ratio of 0.09%, and XLV charges 0.08%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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Fidelity MSCI Health Care Index ETF (FHLC): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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