Fidelity FHLC: Is This Healthcare ETF a Good Investment?
The Fidelity MSCI Health Care Index ETF (FHLC) presents a compelling option for investors seeking exposure to the healthcare sector of the equity market. Launched in October 2013, this passively managed exchange-traded fund has garnered significant attention, particularly among institutional and retail investors drawn to its low cost, transparency, flexibility, and tax efficiency – characteristics increasingly valued in today’s investment landscape. As one of 16 broad Zacks sectors within the Zacks Industry classification, FHLC currently holds the 7th position, placing it within the top 44% of healthcare sector ETFs, reflecting a level of performance relative to its peers. The fund’s objective is to match the performance of the MSCI USA IMI Health Care Index before accounting for associated fees and expenses.
With assets exceeding $2.45 billion, FHLC has established itself as one of the larger ETFs explicitly designed to replicate the performance of the Healthcare – Broad market segment. This substantial asset base underscores investor confidence and provides a stable foundation for the fund’s operation. The ETF’s architecture – mirroring the MSCI USA IMI Health Care 25/50 Index – ensures a consistent approach to tracking healthcare sector trends within the United States. Importantly, the fund’s expense ratio stands at a remarkably low 0.08%, a key factor in its appeal, and it yields a 1.55% 12-month trailing dividend yield.
A significant element of FHLC’s appeal lies in its concentrated portfolio composition, with a near-total allocation to the healthcare sector, approximately 100% of its assets. This strategic focus eliminates sector-specific risk, providing investors with a simplified approach to gaining exposure. The top ten holdings represent a substantial 46.47% of the overall asset base, highlighting the fund’s commitment to core healthcare leadership. Specifically, UnitedHealth Group Inc. (UNH) accounts for roughly 7.97% of the fund, followed by Johnson & Johnson (JNJ) and Merck & Co., Inc. (MRK). These three companies represent significant weightings within the portfolio, reflecting the market’s faith in these established healthcare giants.
Despite offering diversified exposure, FHLC’s performance metrics warrant consideration. As of September 2nd, 2025, the ETF has demonstrated a positive return of approximately 1.27% for the current year, although it has experienced a decline of 10.09% over the past year. The ETF’s beta of 0.65 and a standard deviation of 14.2% over the trailing three-year period indicate a moderate level of risk within the healthcare sector. Containing 438 holdings, the fund effectively mitigates company-specific risks, contributing to its stability. The price range for the past 52 weeks has fluctuated between $61.03 and $74.23, showcasing the inherent volatility of the market.
Investors seeking comparable options within the healthcare sector may consider the Vanguard Health Care ETF (VHT) and the Health Care Select Sector SPDR ETF (XLV). VHT tracks the MSCI US Investable Market Health Care 25/50 Index, while XLV mirrors the Health Care Select Sector Index. Notably, Vanguard Health Care ETF boasts $15.53 billion in assets, Health Care Select Sector SPDR ETF manages $33.85 billion, and VHT has an expense ratio of 0.09%, and XLV charges 0.08%. For those seeking further insights, the Zacks ETF Center provides a valuable resource for screening and researching ETF options, allowing investors to align their investment choices with specific objectives. Accessing the latest recommendations from Zacks Investment Research, including a “7 Best Stocks for the Next 30 Days” report, through Zacks Investment Research offers additional guidance for investors navigating the dynamic world of ETFs and stock market investments.
