Should You Invest in the Vanguard Health Care Index Fund ETF Shares (VHT)?

Designed to provide broad exposure to the Healthcare - Broad segment of the equity market, the Vanguard Health Care Index Fund ETF Shares (VHT) is a passively managed exchange traded fund launched on January 26, 2004.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.

Index Details

The fund is sponsored by Vanguard. It has amassed assets over $18.88 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. VHT seeks to match the performance of the MSCI US Investable Market Health Care 25/50 Index before fees and expenses.

The MSCI US Investable Market Health Care 25/50 Index is made up of stocks of U.S. companies within the health care sector.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.5%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.

Performance and Risk

Year-to-date, the Vanguard Health Care Index Fund ETF Shares has added about 9.89% so far, and was up about 26.34% over the last 12 months (as of 08/18/2026). VHT has traded between $250.29 and $316.72 in this past 52-week period.

The ETF has a beta of 0.59 and standard deviation of 14.17% for the trailing three-year period, making it a medium risk choice in the space. With about 427 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Health Care Index Fund ETF Shares holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VHT is an excellent option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

iShares Global Healthcare ETF (IXJ) tracks S&P Global 1200 Healthcare Sector Index and the State Street Health Care Select Sector SPDR ETF ETF (XLV) tracks Health Care Select Sector Index. iShares Global Healthcare ETF has $4.20 billion in assets, State Street Health Care Select Sector SPDR ETF ETF has $43.50 billion. IXJ has an expense ratio of 0.4%, and XLV charges 0.08%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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