IYH And IHI ETFs: These 2 Healthcare/Medical Funds Compliment Each Other

Summary

• The iShares U.S. Healthcare ETF (IYH) seeks to track the investment results of the Russell 1000 Health Care RIC 22.5/45 Capped Index composed of U.S. equities.
• The iShares U.S. Medical Devices ETF (IHI) seeks to track the performance of the Dow Jones U.S. Select Medical Equipment Index.
• The holdings overlap is only 28 stocks held by both ETFs.  For IYH holders, it only overlaps, by weight, 22% of IHI.
• Since mid-2000, both ETFs have done better than the SPDR S&P 500 Trust ETF (SPY) in both return and risk ratios.  Owning both medical ETFs shows benefits too.
• Developed world demographics bode well for the stocks in these ETFs. Coupled with the other one might be even better strategy.  I rate both as Buys.
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Analyst’s Disclosure:I/we have a beneficial long position in the shares of IHI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.