Vanguard health-care ETF sees record trading as Big Pharma soars
An exchange-traded fund is benefiting from the current hot market for drugmakers.
(Bloomberg) –A boom in major U.S. pharmaceutical stocks is creating a swarm of activity around an exchange-traded fund tracking the massive drugmakers.
The $8.2 billion Vanguard Health Care ETF, known by its ticker VHT, had 1.6 million shares worth $272 million trade Monday, record one-day turnover for the fund. It also hasn’t seen a day of outflows in August, with $145 million of net inflows putting the ETF on track for its best month since June 2017.
U.S. drugmakers are hot, with Pfizer Inc., Eli Lilly & Co. and Merck & Co. soaring to 16-year highs after reporting stronger than expected second-quarter results and the S&P 500 Index pharmaceuticals industry group hitting an all-time high Monday. Together, Pfizer and Merck make up more than 10 percent of the fund’s exposure. Its largest holding is industry bellwether Johnson & Johnson, which is heading for its best four-day run since early 2016.
A smaller health-care fund, BlackRock Inc.’s $850 million iShares U.S. Healthcare Providers ETF, or IHF, saw $48 million of inflows Monday, the most in almost two months. Trading volume in the fund hit $54 million Monday, more than eight times its average over the past year.
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