The global outbreak of COVID-19 has put the spotlight on health care systems across the developed world. We have seen countries like South Korea and Germany react quickly to the crisis and make testing available to their population quickly, which has resulted in lower mortality rates.
However, other nations have struggled to catch up to the needs of the citizenry. Hospitals are being overwhelmed, and political leaders are being forced to make difficult decisions.
Investing in this environment is very risky. However, the health care sector will be leaned on to guide nations through this crisis. This is one of the reasons I’m looking at the Vanguard Health Care ETF (NYSE:VHT) today. Its shares have dropped 25% month-over-month as of close on March 20. This has pushed the ETF into negative territory for 2020.
Some of its top holdings include Johnson & Johnson, UnitedHealth Group – the largest health care company in the world by revenue, and Pfizer. Pfizer is worth noting today as it has just partnered with a German biotech firm called BioNTech SE to work together on a potential COVID-19 vaccine.
These companies plan to work from U.S. and German testing sites. Experts have continued to stress that a working vaccine is still likely 12 to 18 months away.
As it stands right now, U.S. stocks look set to take another beating on Monday, March 23. Investors should watch this ETF closely and consider jumping in at a discount in the still-promising health-care sector.
