VHT ETF: What Is It? A Complete Guide to Returns, Expense Ratio, Holdings and Alternative ETFs
The Vanguard Health Care ETF (VHT) tracks the broad US pharmaceutical, biotech and medical device sectors. Its strengths are a low expense ratio, quarterly dividends and wide diversification from large caps to small and mid caps. The differences in fees and composition versus XLV, a fund in the same sector, are the key selection criteria.
SubscribeWhat Is the Vanguard Health Care ETF?
It is a passive ETF that tracks the US health care sector. It holds the health care industry broadly, including pharmaceuticals, biotech, medical devices and health care services, weighted by market capitalization from large caps to small and mid caps.
It suits long-term investors who want to diversify across the health care sector in a single purchase while prioritizing low fees.
It is an ETF managed by Vanguard using a passive (index-tracking) approach.
How Do You Invest in the Vanguard Health Care ETF?
| Item | Details |
|---|---|
| Tracked Index | MSCI US IMI Health Care 25/50 |
| Management Style | Passive (index-tracking) |
| Rebalancing Frequency | Quarterly |
| Dividend Frequency | Quarterly |
| Expense Ratio | 0.09% |
| Issuer | Vanguard |
The fund replicates the constituents of the health care sector index at their market-cap weights, tracking the performance of the US health care industry as a whole. Unlike some sector ETFs that focus on large caps, it also includes small and mid caps, giving it a wider sector diversification range.
- Broad sector diversification from large caps to small and mid caps
- Fees lower than the category average
Vanguard Health Care ETF Size and Costs (AUM and Expense Ratio)
Assets under management (AUM) stand at $20.0B, and the expense ratio is 0.09% per year.
While the flagship ETF for the same sector is built around large caps, this ETF includes small and mid caps as well, so it tends to hold more securities.
Vanguard Health Care ETF Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe health care sector moves on a combination of its defensive, economy-resistant nature and momentum from new drugs and medical innovation. Short-term movements are affected by drug pricing policy, regulatory issues and the earnings of individual pharmaceutical companies. Returns can show volatility from period to period.
Demand for defensive sectors can bring relatively strong fund inflows during volatile markets, and capital flows across the sector tend to shift with interest rates, the policy environment and big pharma earnings seasons.
Vanguard Health Care ETF Pros and Cons
Its strengths are low fees and broad sector diversification, while its weakness is the volatility that comes from concentration in a single health care sector.
💪 Key Strengths
⚠️ Points to Watch
Vanguard Health Care ETF Alternatives and Related Products
XLV, FHLC and IYH shown in the table are all direct substitutes that track the same US health care sector, differing in whether they focus on large caps or use a broad composition. There are also sub-theme products such as XBI, which focuses on biotech, and IHI, which focuses on medical devices. If you want leveraged exposure, you can consider CURE (3x) and RXL (2x), and if you need to bet in the opposite direction, RXD (inverse) is also an option.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 XLV | State Street Health Care Select Sector SPDR ETF | $179.28 | +0.0% | $47.0B | 0.08% | 1.42% | +22.8% |
 XBI | State Street SPDR S&P Biotech ETF | $150.47 | +0.6% | $10.4B | 0.35% | 0.36% | +38.8% |
 IYH | iShares U.S. Healthcare ETF | $75.42 | +0.0% | $4.5B | 0.37% | 1.06% | +22.5% |
 FHLC | Fidelity MSCI Health Care Index ETF | $86.00 | +0.0% | $3.8B | 0.08% | 1.18% | +22.4% |
 IHI | iShares U.S. Medical Devices ETF | $55.04 | +0.2% | $3.6B | 0.37% | 0.48% | -11.0% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| LLY | Lilly(Eli) & Co | 0.27% | $1279.14 | +0.5% | $1.20T | 43.5 | 0.53% |
| JNJ | Johnson & Johnson | 0.17% | $266.30 | +0.9% | $641.1B | 40.4 | 2.01% |
| ABBV | Abbvie Inc | 0.12% | $286.74 | +0.4% | $506.7B | 81.1 | 2.39% |
| UNH | Unitedhealth Group Inc | 0.09% | $410.70 | -1.8% | $368.6B | 23.4 | 2.19% |
| MRK | Merck & Co Inc | 0.09% | $140.61 | -3.2% | $346.9B | 112.4 | 2.42% |
Checkpoints for Vanguard Health Care ETF Investors
Here are the points to review before investing in VHT. It is highly useful as a core health care sector holding, but it is wise to calmly check the costs, single-sector concentration, drug pricing and health care policy risk, and currency effects before buying.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense Ratio | Check the cumulative cost impact over a long holding period | Remains low |
| 📊 Sector Concentration | Be aware of the weight of the single health care sector | Needs checking |
| 🏛️ Policy Risk | Review the drug pricing and medical regulation environment | Ongoing review needed |
| 💱 Exchange Rate | Impact on returns converted into won | No currency hedge applied |
Concentration in the single health care sector and changes in drug pricing and regulatory policy are the main drivers of volatility. Even as a core sector holding, it can post sizable short-term losses during sector-wide corrections.
It is a suitable choice for long-term investors who want to diversify broadly across the US health care sector at low cost. If you prefer large-cap concentration, XLV fits better, while this ETF suits those who prioritize broad diversification and low fees.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of June 21, 2026.
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