Conservative · Portfolio Changes · Stocks to Consider and Updates

Portfolio Addition – iShares Global Healthcare

Keeping with a diversified conservative portfolio following the removal of CVS Health, I am introducing the iShares Global Healthcare Exchange Traded Fund (NYSE: IXJ – $60.81) for consideration with an initial allocation exposure of 9%. The fund seeks to track the S&P Global 1200 Health Care Index and generally invests at least 90% of its assets in securities or depositary receipts representing foreign securities of the underlying index. Blackrock, who manages the fund, may invest the remainder of its assets in certain futures, options, cash or equivalents, as well as in securities not included in the underlying index. The index measures the performance of companies that the provider deems to be a part of the healthcare sector of the economy and believes are important to global markets. The index has exposure to a broad number of securities in pharmaceuticals, biotechnology and medical devices. The top ten holdings of a total of about 100 large-cap names are:

       Nearly 70% of the companies comprising the index are U.S. based, but the broad geographical reach of the index by country is impressive with 23% in Europe and about 7% in Asia.


       The latest payout from the fund was $0.679489 per share in December and the semi-annual distribution currently yields about 2%. As are most passive, index tracking ETFs, IXJ has a minimal expense to investors at 0.47% of total assets of approximately $2.1 billion. The fund – recently upgraded – is rated three of five stars from Morningstar.

       I am currently positive on the defensive nature of the health care sector (IXJ Beta = .90) and the fund fits nicely into the conservative portfolio diversification model with the transfer of CVS to the income account. In addition, I like the international diversification of the index, which to some extent mitigates the turbulent political issues surrounding the U.S. health care system.

 In the interest of full disclosure, I maintain a position in IXJ.

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