Investing in health-care in Canadian markets is not what most investors think it is. Canada does have a small minority of medical device companies in pharmaceutical/therapeutic drug companies.
However, the overwhelming majority of Canada's health-care sector continues to be made up of cannabis producers and medicinal, cannabis-related spinoffs.
Anyone who has read my commentary on the Canadian cannabis sector knows my bearish stance on this sector. Accordingly, I don't see the upside in investing in any Canadian traded health-care ETF.
One ETF I do think holds tremendous value for Canadian investors seeking true healthcare exposure is the Evolved Global Healthcare ETF (NYSE:LIFE). This is a U.S.-focused ETF with holdings spanning the globe, offering a “truer” exposure to the healthcare sector for Canadian investors interested in this space.
The COVID-19 pandemic has highlighted the importance of the health care sector globally, as well as the relative underinvestment in the sector in recent years.
The lack of preparedness for this pandemic, as well as a real need and a focus rush to find a vaccine and therapeutic solutions to the coronavirus has led to expectations of higher capital inflows in the sector.
This ETF is a solid income play as well for investors, providing a hefty 7% dividend yield in addition to obvious capital appreciation upside. I would encourage Canadian investors, in particular, to consider this ETF as a great diversification play over the long term due to the quality and scope of companies held in this fund.
Invest wisely, my friends.
