UnitedHealth Group UNH, the biggest U.S. well being insurer, reported combined fourth-quarter 2024 outcomes. It breezed previous the Zacks Consensus Estimate for earnings however missed the identical for revenues. UNH shares dropped almost 6% on the day following the outcomes.
This has put the ETFs having the biggest allocation to this medical health insurance big, like iShares U.S. Healthcare Suppliers ETF IHF, Well being Care Choose Sector SPDR Fund XLV, iShares U.S. Healthcare ETF IYH, Vanguard Well being Care ETF VHT and Constancy MSCI Well being Care Index ETF FHLC, in focus.
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Earnings in Focus
Earnings per share got here in at $6.81, topping the Zacks Consensus Estimate of $6.71 and better than the year-ago earnings of $6.16. Revenues grew 6.8% 12 months over 12 months to $100.8 billion however had been shy of the estimated $102.2 billion. The income miss was attributable to weak spot in its medical health insurance enterprise (see: all the Healthcare ETFs here).
Optum revenues elevated 9.4% to $65.1 billion. Optum Well being served 4.7 million individuals in 2024 with value-based care and expects to develop to serve a further 650,000 sufferers in 2025. Medical ratio (a measure of the proportion of premiums paid out for medical providers) rose to 87.6%. Administration forecast that the ratio will likely be within the vary of 86%-87% for 2025.
The well being insurer affirmed its 2025 revenues within the vary of $450-$455 billion and earnings per share of $29.50-$30.00.
ETFs in Focus
Let’s delve into every ETF under:
iShares U.S. Healthcare Suppliers ETF (IHF)
iShares U.S. Healthcare Suppliers ETF follows the Dow Jones U.S. Choose Healthcare Suppliers Index with publicity to firms that present medical health insurance, diagnostics and specialised remedy. The fund holds 67 securities in its basket. UNH occupies the highest place with a 23% share (learn: Wall Street Dives on Less Dovish Fed: 5 ETF Zones That Win).
iShares U.S. Healthcare Suppliers ETF has amassed $691.9 million in its asset base, whereas quantity is gentle at about 96,000 shares per day, on common. It fees 40 bps in annual charges and has a Zacks ETF Rank #3 (Maintain) with a Medium danger outlook.
Well being Care Choose Sector SPDR Fund (XLV)
Well being Care Choose Sector SPDR Fund is the preferred healthcare ETF and follows the Well being Care Choose Sector Index. It holds 61 securities in its basket, with UnitedHealth taking the second spot at 9.7% of the belongings. Pharma, healthcare tools & provides, healthcare suppliers & providers, and biotechnology take the biggest share at 30%, 22.8%, 21.1% and 15.4%, respectively, from a sector look.
Well being Care Choose Sector SPDR Fund has AUM of $38.2 billion in its asset base and trades in a heavy quantity of round 8 million shares. The expense ratio is available in at 0.09%. XLV has a Zacks ETF Rank #1 (Sturdy Purchase) with a Medium danger outlook (learn: 4 Sector ETFs & Stocks to Benefit Despite Cooling Inflation).
iShares U.S. Healthcare ETF (IYH)
iShares U.S. Healthcare ETF provides publicity to 105 U.S. healthcare tools and providers, prescription drugs, and biotechnology firms by monitoring the Russell 1000 Well being Care RIC 22.5/45 Capped Gross Index. Right here once more, UnitedHealth is the second agency, accounting for 9.3% of the full belongings. When it comes to industrial publicity, pharma takes the highest spot at 30%, adopted by healthcare tools (21.8%) and biotech (17.5%).
iShares U.S. Healthcare ETF has amassed $3.1 billion in its asset base whereas charging 39 bps in annual charges. It trades in a superb quantity of round 348,000 shares a day and has a Zacks ETF Rank #2 (Purchase) with a Medium danger outlook.
Vanguard Well being Care ETF (VHT)
Vanguard Well being Care ETF tracks the MSCI US Investable Market Well being Care 25/50 Index and holds 416 shares in its basket. Of those, UnitedHealth takes the second spot with a 9% allocation. Pharma takes the biggest share at 27.3%, whereas healthcare tools and biotech spherical off the highest three spots.
Vanguard Well being Care ETF can also be probably the most fashionable and liquid ETFs, with AUM of $17 billion and a mean every day quantity of about 317,000 shares. It fees 10 bps in annual charges and has a Zacks ETF Rank #1 with a Medium danger outlook.
Constancy MSCI Well being Care Index ETF (FHLC)
Constancy MSCI Well being Care Index ETF gives publicity to 368 healthcare shares and tracks the MSCI USA IMI Well being Care Index. UnitedHealth occupies the second place with 8% of the belongings. Pharma accounts for 28.3% share whereas healthcare tools and provides, healthcare suppliers and providers, and biotech spherical off the highest three spots with double-digit publicity every.
Constancy MSCI Well being Care Index ETF has AUM of $2.6 billion. Its expense ratio is 0.08%, whereas quantity is nice at 149,000 shares a day. FHLC has a Zacks ETF Rank #3 with a Medium danger outlook.
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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Health Care Select Sector SPDR ETF (XLV): ETF Research Reports
iShares U.S. Healthcare ETF (IYH): ETF Research Reports
Vanguard Health Care ETF (VHT): ETF Research Reports
iShares U.S. Healthcare Providers ETF (IHF): ETF Research Reports
Fidelity MSCI Health Care Index ETF (FHLC): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
