Home etftrends.com Equal-Weight Strategy ETF Outpaces S&P 500 Health Care Index

Equal-Weight Strategy ETF Outpaces S&P 500 Health Care Index

Healthcare is back in the forefront in the capital markets, and in the case of exchange traded fund (ETF) offerings from Invesco, one small-cap fund is outpacing its large-cap brethren.

The Omicron variant spurred a move into value equities, and one area that’s never in a shortage of value-oriented plays is the healthcare sector. That’s especially been the case earlier this year during the global vaccine roll-out and again with the latest COVID-19 variant.

“As the COVID-19 pandemic recedes, routine doctor and hospital visits, along with deferred medical procedures such as cataract surgery and heart valve replacements, are returning to normal,” says Kiplinger. “The pandemic has been a global tragedy, but if there is one silver lining it is that the miraculous development of effective COVID-19 vaccines in less than a year is helping to usher in a golden age for the pharmaceutical and health sciences industries.”

“We’re seeing a revolution today in vaccine development,” says Andy Acker, manager of Janus Henderson Global Life Sciences.

Investors looking for a strong performer that can withstand volatility may want to consider the Invesco S&P 500 Equal Weight Health Care ETF (RYH). Over a three-year period, the fund outperforms the S&P 500 Health Care sector, which speaks to the effectiveness of RYH using an equal-weight strategy to minimize concentration risk.

RYH seeks to track the investment results of the S&P 500® Equal Weight Health Care Index. The underlying index is composed of all of the components of the S&P 500® Health Care Index, which is an index that contains the common stocks of all companies included in the S&P 500® Index that are classified as members of the healthcare sector.

RYH Chart

A Small-Cap Option

For growth opportunities in the healthcare sector, there’s the Invesco S&P SmallCap Health Care ETF (PSCH) to consider. The fund seeks to track the investment results of the S&P SmallCap 600® Capped Health Care Index. Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC compiles, maintains, and calculates the index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the healthcare sector, as defined by the Global Industry Classification Standard.

Small-cap strength exhibited itself in the beginning of 2021, where PSCH outperformed RYH. It’s a reminder to investors that when momentum is one the side of small-cap strength, it can propel opportunities for higher gains and vice versa when markets falter.

RYH Chart

RYH Chart

For more news, information, and strategy, visit the Innovative ETFs Channel.

newETFs.io respects the hard work of others and gives all credit to the remarkable folks at ETFTrends.com. This excerpt/article was pulled from their RSS feed; click here to view the original. Please note that on occasion, the RSS feed will not have the author. When this happens this site defaults the author to "News". Make no mistake, this excerpt/article was not created by newETFs.io, it was simply shared with you.