The Fidelity MSCI Health Care Index ETF (FHLC) charges just 0.084% in fees but carries a 13% concentration in Eli Lilly. The fund gained 17.9% over one year, but only returned 154% over ten years versus the S&P 500’s 235%.

Enhanced ACA premium tax credits face an 87.5% probability of expiring by January 31, 2026, which could impact health insurers like UnitedHealth. FHLC’s 1.33% yield may be underwhelming for income seekers compared to other market alternatives.

Investors comparing healthcare sector funds should consider Vanguard Health Care ETF (NYSEARCA:VHT) as an alternative to FHLC. VHT charges a slightly higher expense ratio of 0.09% but offers superior liquidity and a slightly higher dividend yield of 1.38%.

FHLC works best as a tactical healthcare sector allocation for investors who want low-cost exposure and believe in the sector’s recent momentum. However, the concentration risk and historical underperformance demand careful position sizing.

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Read more at Yahoo Finance: Is Fidelity’s Health Care ETF A Good Buy Right Now?