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(but still make lots of money)?

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Unpacking the iShares Global Healthcare ETF (ASX:IXJ)

With healthcare well and truly in the spotlight in 2020, let’s take a look at the iShares Global Healthcare ETF (ASX: IXJ) and its merits in a diversified portfolio.

ETFs 101

Exchange-traded funds, or ETFs, are investment funds listed on a securities exchange that provide exposure to a range of shares or assets with a single purchase. ETFs can be ‘managed funds’ or ‘index funds’, or in other words, active or passive.

Getting to know the IXJ ETF

The iShares Global Healthcare ETF is a sector ETF that provides investors with exposure to companies within a certain industry or sector of the market.

Sector ETFs focus on one of the 11 Global Industry Classification Standard (GICS) sectors on the ASX, including financials, consumer staples, information technology and, of course, healthcare.

The IXJ ETF invests in a basket of biotechnology, healthcare, medical equipment and pharmaceuticals companies across the globe. At the time of writing, the ETF has around 120 holdings, primarily in the United States which accounts for 67% of the fund. Smaller weightings are given to Switzerland (10%), Japan (6%), the UK (4%) and Denmark (3%), among others.

Its top holdings include the likes of Johnson & JohnsonNovartisPfizer and AstraZeneca.

Aside from providing global diversification for ASX investors, the iShares Global Healthcare ETF offers tactical exposure to a sector with tailwinds at its back – the strongest being ageing populations across the world that will start to require greater amounts of care.

How has the IXJ ETF performed?

Source: Best ETFs IXJ 5-year price chart

Of course, past performance is not indicative of future performance, but here’s how the IXJ ETF has fared in recent years.

According to iShares, over the past year, the IXJ ETF has achieved a total return of 12.01%. Going back further, the ETF has delivered growth of 16.48% per year over the last 10 years.

Since inception all the way back in 2001, the fund has returned an average of 5.65% per annum.

These returns include semi-annual distributions, and the 0.47% yearly management fee has also been taken into account. Based on historical distributions, the ETF currently offers a yield of around 1.47%.

Is IXJ a good ETF?

The IXJ ETF may be suitable for Australian investors searching for global exposure to the healthcare sector.

Since this is a sector ETF, it may be more suitable as a satellite or tactical holding rather than being at the core of a portfolio. The satellite/tactical part of a portfolio is the smaller part that investors can reserve for their ‘active’ investing and riskier positions.

You can learn more about the core and satellite approach by reading the Rask investment philosophy or by watching episode 46 of The Australian Finance Podcast:

Other options in the global healthcare space include the BetaShares Global Healthcare ETF (ASX: DRUG) and the new VanEck Global Healthcare Leaders ETF (ASX: HLTH).

To read more about IXJ, check out our free report here.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

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This ETF makes investing in ETFs "Super-Easy".

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From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

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Disclosure: At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

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General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

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