This passively managed ETF holds 20 global healthcare companies that are the constituents of the Solactive Global Healthcare 20 Index. It has hedged and unhedged options and uses a covered call strategy for up to a third of the holdings to enhance yield.
Income Investor
This ETF offers exposure to a diversified group of global drug firms. It also captures developments in weight loss medications with these companies. The holdings have the financial depth to invest in research, expand production, leverage their global marketing reach and navigate differing regulatory demands.
The portfolio is heavily tilted toward US large cap healthcare names, especially big pharma and managed care. LIFE writes covered calls on up to 33% of these holdings. This has given investors a high stream of income but caps the upside. Eli Lilly and Intuitive Surgical have both had strong years, but that is not captured in the ETF. This is because LIFE is designed for those who prefer income over capital growth. The covered calls mean it will usually underperform in bull markets but outperform in flat or weak markets. Since 2022, the healthcare sector has been a poor performer and LIFE’s capped upside made the relative lag even worse. - Adam Mayers
Sorry!
Only current subscribers of The Income Investor may view the details of this recommendation.
Interactive Performance Chart
LIFE was first recommended here on August 17, 2024