Healthcare is a defensive industry enjoying strong secular tailwinds. Considering the world's estimated aging demographics, it's a veritable freight train.

IYH exhibits low volatility, low beta, and high resilience during recessions. It has a 10-year annualized return of 13.56%. The largest holdings are represented by highly liquid names with multiple brands. The fund uniquely combines growth companies with consistently high dividends – stocks with long-term outperformance. After a lull in January, big healthcare stocks are slowly bottoming out.

IYH embodies a quarter this is resilient at some stage in each deflationary recessions and inflationary intervals. All through disinflationary recessions, Healthcare is less stricken by corporate capex and discretionary purchaser spending, both of which pass into hibernation. During inflationary cycles, healthcare is much less exposed to a "consumer reluctance": healthcare carriers are normally able to skip-via inflationary fee will increase immediately through to the consumer and their insurers.

With a low beta of 0.66, IYH reveals classic resilience. IYH has a 3 year widespread deviation of 16.21%, which is 33% lower than the S&P 500 (24.19%) and the medium of all ETFs (24.24%). It has an alpha of 6.08, a Sharpe ratio of 0.66, a 5 year Sortino of 0.78, and a 10 yr annualized return of 13.56% – keen on an agreeable high-priced ratio of 0.38.

If demographics are destiny, the iShares US Healthcare ETF (IYH ) is certainly destiny's child. The big-cap wellness fund will be the focus of attention for the next three years. Two long-term factors are evident in the “big picture” driving the healthcare industry.

Aging populations in developed countries (and, unexpectedly, China) will continue unabating. In China, average life expectancy rose from 52 to 76 years in 60 years. That's over a billion people. In 2020, 55.7 million people in the United States (approximately 17% of the population) were 65 or older, a 38% increase from 2010.

There will be no recession in spending on drugs and medical equipment. Aside from the pandemic shutdown outliers, the chart below shows that they have risen relentlessly during every recession since the 1970.