The U.S. healthcare industry is undergoing some major changes. With rising costs and a stronger focus on value-based care—where the aim is to improve outcomes while cutting expenses—there’s a big opportunity for companies offering innovative and efficient solutions. This shift is not only transforming healthcare but also creating exciting investment opportunities.
ETFs have made it much easier for investors to access a wide range of strategies and ideas, including different sectors like healthcare. While most healthcare ETFs tend to be passive, simply tracking an index, there are more strategic options available.
For example, the Harbor Health Care UCITS ETF (BIT:WELL) takes an active approach, giving European investors the chance to invest in companies that stand to benefit from these industry shifts. By using expert analysis, WELL carefully aims to select stocks with growth potential.
Here’s everything you need to know about this ETF.
How does WELL ETF Work?
Harbor Health Care UCITS ETF (WELL) aims to provide exposure to the secular growth and innovation of the U.S. health care system, while achieving alpha relative to the broader Health Care sector by investing in quality businesses with differentiated products, technologies, and services which meet the team’s disciplined valuation criteria.
This includes disruptive themes such as targeted oncology, liquid biopsy, gene therapy, orphan diseases, and others that represent compelling long-term growth opportunities.
The Health Care ETF is actively managed by the expert team at Westfield Capital Management.
As of September 17, 2024, the fund held 34 positions, with its top 10 holdings making up 58% of its total assets. These top holdings include:
- Ascendis Pharma A/S – 12.09%
- AbbVie Inc (NYSE:ABBV). – 7.64%
- Legend Biotech Corp. ADR – 7.44%
- Pfizer Inc. (NYSE:PFE) – 6.47%
- Masimo Corp. – 4.75%
- Option Care Health Inc. – 4.47%
- Icon PLC – 4.32%
- UnitedHealth Group Inc (NYSE:UNH). – 3.79%
- Vaxcyte Inc. – 3.59%
- Insulet Corp. – 3.10%
Keep in mind that holdings are subject to change.
In terms of sector exposure, healthcare was the dominant sector, representing 81% of the fund's assets. Medical devices and biological engineering followed, contributing 7.2% and 6.31%, respectively.
The fund's most notable country exposures were the United States (76%), Denmark (12%), Ireland (4.4%), and the Netherlands (2.6%).
Why You Should Consider WELL ETF
According to the National Health Expenditure Accounts (NHEA), U.S. health care spending grew 4.1 percent in 2022, reaching $4.5 trillion or $13,493 per person. As a share of the nation's Gross Domestic Product, health spending accounted for 17.3 percent.
Health care costs are increasing, meaning a shift towards value-based approaches is likely needed, with lower costs and improved patient outcomes.
This creates opportunities for healthcare companies that are best positioned to lead the transition from quantity to value-based care. Westfield, the ETF's managers, are experienced active investors, employing a bottom-up process to identify companies that meet their stringent fundamental criteria, followed by a thorough qualitative review of each selected company.
Matthew Renna, Managing Partner & Portfolio Manager of the Harbor Health Care UCITS ETF (WELL), comments: “WELL seeks to leverage Westfield Capital’s tenured team and process to identify the best secular growth stories within each subsector of health care. Market and sector volatility over the last few years have presented compelling investment opportunities in some of the highest quality businesses in US health care, and we are seeing value in many companies, whose products, technologies, and services offer solutions to all stakeholders within the health care ecosystem. We believe that the convergence of innovation and value-based care within the sector should drive above market shareholder returns over the next decade.”
WELL ETF has an expense ratio of 0.89% and trades on multiple European exchanges including LSE, Xetra, Borsa Italiana, SIX, BMV, and Euronext Paris.
About HANetf
HANetf is an independent ETF and ETC specialist that partners with asset managers from around the world to bring new and innovative investment solutions to Europe through its white-label platform.