Q: I have been buying HHL ETF over the last number of months, but it continues to struggle. Would say this is just sector weakness and if so how do you see the sector - will it eventually recover? My only other Healthcare stock is is ABBV so I am not overly exposed but this ETF is close to a full position, for income. Are there any issues with the ETF, and are you cautious? Thanks so much.
5i Research Answer:
HHL is down 4% this year. Its yield is high due to its strategy, and we do not think anything is 'wrong' here. The US sector is down 5.5% YTD so it is marginally outperforming. We might not expect a whole lot from it this year, but with sentiment horrible and valuations low, there is potential for a bounce on any good news. We would be fine holding this.