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Tackle Market Uncertainty With Strategic Healthcare Exposure

BY | ETF Database
7:42 am ET 09/14/26 | 10 VIEWS
With much of the attention in the capital markets directed towards the technology sector, it’s easy to forget other sectors like healthcare. However, it’s key to consider other sectors within your portfolio to help hedge against heavy volatility. As such, defense-oriented sectors like healthcare can provide investors with resilient end-demand and serve as a stabilizing anchor for multi-asset portfolios. The Fidelity MSCI Health Care Index ETF (FHLC A) offers a low-cost way to capture the structural strengths of the U.S. healthcare sector.Key Takeaways: FHLC provides a defensive portfolio anchor to help offset volatility, giving investors broad access to the steady end-demand of the U.S. healthcare market. The fund tracks the MSCI USA IMI Health Care Index to deliver broad exposure across pharmaceutical giants and innovative sub-industries such as biotechnology, medical devices, and healthcare providers. Utilizing a representative sampling strategy, FHLC efficiently replicates its underlying benchmark’s market cap, dividend yield, and risk profile while keeping overall transaction costs low with a 0.08% expense ratio. See More: The Active Advantage in Emerging Markets With Fidelity’s FFEMBroader Exposure to Core Sector DriversAt the heart of FHLC is the index it tracks, which is the MSCI USA IMI Health Care Index (the “Index”). By tracking a broader investable market index, FHLC’s strategy extends beyond large-cap pharmaceutical giants to capture a wide range of sub-industries, including companies at the forefront of healthcare innovation. Portfolio holdings span biotechnology, medical devices, life sciences tools, healthcare providers, and equipment manufacturers. This diversified mix ensures exposure to long-term tailwinds, such as advancing medical technology and aging global demographics. It also insulates portfolios from regulatory or clinical trial risks tied to any single sub-sector.Optimized Indexing and Portfolio EfficiencyTo track its Index efficiently, the fund utilizes a representative sampling strategy. Portfolio managers select a carefully curated subset of securities that collectively mirrors the overall index in market capitalization, industry weightings, dividend yield, liquidity, and risk profile. This indexing approach allows the fund to match the performance and fundamental characteristics of the Index without incurring unnecessary transaction costs. That said, FHLC’s expense ratio comes at a low 0.08%. Historically, the healthcare sector demonstrates earnings stability during broader economic decelerations as consumer demand for medical treatments and pharmaceuticals remains relatively inelastic. By offering low-cost access to both established defensive compounders as well as innovative medical pioneers, FHLC could be ideal for investors seeking to manage downside risk while maintaining equity market participation through healthcare sector exposure. For more news, information, and analysis, visit the ETF Investing Content Hub. Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles. 1280322.1.0

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