A Safe ETF to Buy That's Risen 22% in 12 Months - InvestingChannel

January 4, 2025

A Safe ETF to Buy That’s Risen 22% in 12 Months

by Baystreet.ca0109

One sector that is a great place to invest right now is healthcare. Whether there’s a recession going on or not, healthcare is something people can’t just forgo. And with the COVID-19 pandemic disrupting ongoing, day-to-day care for millions of people, there’s a lot of pent-up demand out there.

For Canadian investors looking to invest in healthcare and who want exposure to the U.S. market, there’s a great exchange-traded fund (ETF) to consider – BMO Equal Weight US Health Care Hedged to CAD Index (TSX:ZUH). The fund is made up entirely of healthcare stocks in the U.S., including big names like DexCom (NASDAQ:DXCM), Seagen (NASDAQ:SGEN), and AbbVie (NYSE:ABBV).

There’s great diversification in the fund as no one stock makes up more than even 2.5% of the total assets. That ensures that the impact a single stock has on the fund is very limited, minimizing an investor’s overall risk.

The ETF has been a great place to invest in the past year as it has outperformed the S&P 500, rising 22% while the index has increased by just 15%. And that’s with the healthcare industry battling the COVID-19 pandemic which has forced hospitals to defer procedures, resulting in many companies not doing as well as they normally would.

This year, as vaccines are rolling out, things could slowly be getting back to normal and that could make the sector a much better buy. And healthcare is generally a pretty recession-proof place to invest in to begin with, especially over the long term.

With an expense ratio of just 0.35%, you won’t be paying much in fees on this ETF, ensuring that vast majority of the gains you earn from this investment will remain in your portfolio.