The Vanguard Health Care ETF (VHT) provides diversified exposure to the U.S. healthcare sector, including large pharmaceutical firms and small biotech companies, with a low-cost, buy-and-hold approach. Despite healthcare's defensive reputation, VHT has underperformed the broader U.S. stock market over the past decade and five years, reflecting challenges like regulatory risks and concentration in a few mega-cap stocks. The fund pays a modest dividend and suits investors seeking healthcare sector growth as part of a diversified portfolio, especially given aging populations driving demand. However, investors should weigh VHT's slower growth against its defensive qualities and sector-specific risks before committing.
