5 Best Pharma ETFs

4. iShares U.S. Medical Devices ETF (NYSEARCA:IHI)

5-Year Performance as of September 11, 2023: 41.21%

Total Net Assets as of September 11, 2023: $6.1 billion

Expense Ratio: 0.40%

iShares U.S. Medical Devices ETF (NYSEARCA:IHI) is focused on replicating the performance of the Dow Jones U.S. Select Medical Equipment Index. The fund was created in May 2006.

iShares U.S. Medical Devices ETF (NYSEARCA:IHI) has 61 holdings, with Thermo Fisher Scientific Inc. (NYSE:TMO), Abbott Laboratories (NYSE:ABT), and Medtronic plc (NYSE:MDT) occupying the top three positions with a combined weightage of 39.46%.

Here’s what Appleseed Fund said about Medtronic plc (NYSE:MDT) in its Q1 2023 investor letter:

“During the most recent quarter, Appleseed Fund added three new equity holdings: Medtronic plc (NYSE:MDT), Stanley Black & Decker (SWK), and Synovus Financial (SNV). Medtronic is the world’s largest device manufacturer, and it holds the number one or number two market share in most of its product segments. Medtronic’s business is heavily weighted towards complicated in-patient procedures, which are typically quite profitable. Industry dynamics are quite attractive with an aging global population and the growth of improved healthcare in emerging markets; furthermore, most of its segments are highly concentrated with just 2-3 players that split each segment’s market share, affording the key participants with significant economies of scale and pricing power. The Company has been recently addressing several temporary headwinds including a strong dollar, inflation, a delayed recovery in surgical volumes from the coronavirus pandemic, and supply chain issues. Once these issues reach the rearview mirror, the Company’s growth and margin expansion plans should transform into reality.”