Tag: ETF

  • Vanguard Health Care Index Fund ETF Shares (VHT)

    Vanguard Health Care Index Fund ETF Shares (VHT)

    Vanguard Health Care Index Fund ETF
    Healthcare ETF is good for investors with less risk tolerance
    Vanguard Health Care Index Fund ETF is one of the largest in the stock market

    Vanguard Health Care Index Fund ETF is focused on stocks in the U.S. health care sector. It is managed by Vanguard and is covering health care stocks in the U.S. stock market. It is a big fund that holds shares of 388 companies. The Fund owns shares of Pfizer Inc, Merck & Co, AbbVie Inc., Johnson & Johnson, UnitedHealth Group Inc., and Abbott Labs. Its 10 top holdings account for almost 45% of the portfolio. But the fund has an extremely good diversified portfolio. It has holdings in pharmaceuticals, biotechnology, health care equipment, health care, supplies, facilities, services, technology, distributors, and life sciences tools and services.

    Healthcare stocks are hot

    Everyone needs health care and everywhere. But the main source comes from boomers. We have nothing against them, but the truth is that as people are aging, they need more health care. Correlated with this is the increased demand for medical products. But this isn’t the whole truth. 

    Also, there is great progress in new technologies that are likely to create great growth for companies in this industry. 

    For example, pharmaceuticals. You can see drugmakers that are developing new procedures, new methods, and drugs. Today we have personalized therapy, based on personal genetic data for each patient individually. This is especially important for cancer treatment, for example.

    Today, biotechs and pharmaceutical companies are practicing gene editing as the treatment for rare genetic diseases.

    The healthcare field is huge and connected. For instance, for early diagnosis of cancer, the liquid biopsy is very popular today and accurate. But someone had to develop it. The same is with AIs and robotics, medical device companies are developing new types of high-tech equipment. So many companies are involved to improve healthcare services. Look at the telehealth, it is adopted broadly. We have robots as surgeons. Monitoring patients with chronic diseases out of hospitals is easier than ever.  

    These products are not aimed at older populations only. Also, we have great progress in aesthetics, skincare, body care, hygiene, etc. 

    Can you see now why healthcare is a hot zone of interest for investors?

    Vanguard Health Care Index Fund ETF Shares 

    Vanguard discovered the ETFs. 

    It tracks the performance of the MSCI U.S. Investable Market Index (IMI)/Health Care 25/50.  

    This ETF has delivered an average annual return of 9.47% since it started in 2004. It has generated average annual returns of 9.78% over the last three years and 9.2% over the last five years.

    The Fund’s dividend yield is of 2,1%, the expense ratio 0.10% which is one of the lowest among ETFs.

    Vanguard Health Care Index Fund ETF

    Vanguard Health Care gives wide exposure. VHT stock is cheap to hold. Its liquidity is strong. The problem is the same as with other Vanguard funds. It is restricted transparency since the holdings are published monthly with 2 weeks delay.

    Still, for the long- term investors a reduction of transparency shouldn’t so much important. VHT fell by -0.13% on Thursday, December 5, but rose for 0,69% on Friday, December 6. The current price is $187.93, $1.29 more than the previous one. Daily fluctuation of stock was 0.79%, a day high was $188.50, a day low was $187.02.

    During the last 2 weeks, the stock price was shifting up and down but still, the 2-weeks gain was 2.78%.
    Since the volume has increased by 47 673 shares on falling prices, you should take this as an early sign of increasing risk in the next several days. Anyway, the price is dropping so it is time to buy it.

    According to analysts, the stock is in the upper line of a rising trend in the short term. This can be a very good selling chance for the short-term traders because the move towards the lower band of the trend can be expected.
    If the price breaks up the top trend line at $188.45 it is expected to increase by 11.09% in the next 3 months with a price between $195 and $210 at the end of this period.

    Bottom line

    Investing in a healthcare ETF decreases the risks for investors thanks to a diversified portfolio across various stocks.
    Moreover, ETFs can modify their holdings when it is necessary. Also, healthcare ETFs can resist during economic downturns because we will all need medical care no matter if it a crisis or not. But keep in mind, ETFs can drop during the crisis or recession too. They are not immune. But as the lesson from 2008, when some ETFs dropped by two-digit percentages, they had been rising again and did it fast.
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    Featured image credit: *Total Shape*

  • UGAZ And DGAZ Stocks – How To Trade Them

    UGAZ And DGAZ Stocks – How To Trade Them

    (Updated October 2021)

    UGAZ And DGAZ Stocks

    UGAZ and DGAZ are ETNs tracking natural gas prices.
    Energy exchange-traded products (ETPs) might be a good trading opportunity as much as energy ETFs.

    UGAZ and DGAZ stock closely watch the US Natural Gas Fund (UNG) and UNG tracks the price movements in natural gas. 

    Let’s make a distinction between those two.

    The main purpose of UGAZ (VelocityShares 3x Long Natural Gas) is to increase the daily performance of UNG by three times. That’s 300%. To make this clear, if UNG price grows 1%, UGAZ will display a daily increase of 3%. The best time to trade UGAZ is when you have a bullish sentiment on UNG.

    The main aim of DGAZ (VelocityShares 3x Inverse Natural Gas) is to generate profits from the losses in the UNG fund. DGAZ will increase the losses by three times inversely. Meaning, if UNG price drops by 1%, DGAZ could bring you a gain of 3%. So, the best time to think about DGAZ is when you have a bearish sentiment on the UNG fund.
    As you can see, both UGAZ and DGAZ have 3:1 leverage. That can notably boost your potential profit.

    Trading UGAZ and DGAZ

    If you want to trade them, it’s vital to watch the UNG fund. UNG fund is the basis of ETF that runs both of them. This can be a complex fund but you can go short in the long term and consider both UGAZ and DGAZ. Natural gas is a highly volatile commodity and UNG is not straight associated with natural gas in the physical sense. So, UNG isn’t a clever investment if you keep in mind it fell by more than 90% after its start. Also, it doesn’t pay dividends. Instead, UNG uses future contracts and OTC exchanges to find and copy the natural gas price. It doesn’t hold stocks. So, we can say that UNG isn’t a good investment by itself. There is where UGAZ and DGAZ come to the scene. If you don’t care for dividends and just want to keep the position for a short-time the long-term volatility of FUNG will not affect your investment.

    As we said, UGAZ increases the UNG gains, while DGAZ goes up when UNG falls in price. But keep for the short-term, as long-term holding is never recommended.

    UGAZ and DGAZ trading opportunities

    These products can be risky. Well, you have to follow the news as ETNs give 3-time leverage in a single day. As we said, when the natural gas price rises by 1%, UGAZ will rise by 3%, and DGAZ will fall by 3%. To repeat, if you want to hold UGAZ or DGAZ the percentage performance will oppose your expectations.
    A lot of circumstances may influence these products. For example, politics, global economy, supply and demand, weather, interest rates, and many others.
    The way to trade USO or UNG is to trade options. That will allow you to achieve better risk-reward levels. The profit potential could be tremendous.

    Bottom line

    If you look at the historical data you will find peaks over winter, for example, but also, sometimes the price can make a sharp move down.
    Why does this happen? The natural gas price depends on weather forecasts. So, you have to watch that. If you see the meteorologists are expecting a warm winter you can be sure the demand will be lower. So, pay more attention to DGAZ.
    The other factor that may influence the gas price is the change in natural gas supply. So, you have to keep attention on weekly natural gas storage reports.
    Both will give you the future course of the natural gas price. And, to add more pain, remember, UNG isn’t always successful while mimicking the gas prices. You have to be ready for the UNG price failure.
    UGAZ is a tactical trading tool. It provides 3-time exposure to its reference index, the S&P GSCI Natural Gas Excess Return Index. This ETN is not designed like a buy and holds an investment. The return can differ hugely from its initial exposure.
    It consists of complex effects and extreme concentration on quick period natural gas prospects.
    DGAZ is the inverse product, it is intended to be a tactical trading tool, not a buy-and-hold investment. It is for a one-day holding period.