VHT: You Won't Get Defensive Healthcare Exposure Here (Archive)
VHT’s pharma and biotech tilt undermines its typical defensive healthcare profile.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- Healthcare is considered a defensive sector and due to the brand name and cheap exposure, Vanguard's ETF prima-facie looks like a promising idea.
- However, outsized exposure to pharmaceuticals and biotechnology makes VHT a high beta healthcare ETF, undermining its defensive qualities.
- VHT's does not benefit by having its largest sub-sector mix in pharmaceuticals, as these companies have to face the prospects of price cuts head-on.
- Key tailwinds include an aging population in the US and the growth of smart healthcare, but I believe it is insufficient to turn VHT into a buy.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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