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Special Report This ETF Is Proof That the Healthcare Rebound Is RealAuthored by Jordan Chussler. Originally Published: 1/11/2026. 
Key Takeaways - After years of trailing the S&P 500, health care has rebounded, leading all other sectors with a 19% gain over the past six months.
- The bullish case for that rally to continue involves America’s GLP-1 drug obsession and incredibly low health care stock valuations.
- The Vanguard Health Care ETF provides broad exposure and is off to a strong start in 2026.
With well-publicized losses for companies including UnitedHealth Group (NYSE: UNH), Elevance Health (NYSE: ELV), and Wegovy and Ozempic maker Novo Nordisk (NYSE: NVO), the healthcare sector failed to outperform the broad market last year. In the three years before 2025, the sector posted modest returns: 2.6% in 2024, 2.1% in 2023 and a 2.0% loss in 2022. Imagine a bull market so powerful, every single investor became a millionaire. Not by finding the next NVIDIA or Bitcoin, but by owning a simple index fund.
It sounds impossible. Yet it happened – just a short time ago. Now a legendary figure says: "Brace yourselves. It's about to happen here, in America. But fair warning – it could be the worst thing that ever happens to you."
This story has received little coverage in the press. But if history repeats, it could bump tens of millions of Americans into a 7-figure net worth practically overnight. Click here for the full story. But healthcare stocks appear to have turned a corner. Over the past six months, the sector—a sector that benefits from inelastic demand—has led all 11 sectors of the S&P 500 with a nearly 19% gain. According to investment professionals, the trend that began in mid-2025 is likely to continue into the new year. For shareholders of the Vanguard Health Care ETF (NYSEARCA: VHT), that is already proving to be true. 2 Major Catalysts for the Health Care Sector There are two major tailwinds that should help health stocks sustain this momentum. One—the mass adoption of weight-loss drugs—helped spark the sector's rebound in mid-2025. The other—comparatively low valuations—could continue to attract inflows as investors look to lock in profits and hedge against more volatile positions. America's Weight-Loss Treatment Craze Weight-loss treatments, including GLP-1 agonists and semaglutide therapies such as Novo Nordisk's products Ozempic and Wegovy, are becoming widely adopted. At the same time, pharmaceutical companies are shifting from injectable formulations to pill form, while others, like Pfizer (NYSE: PFE), are doubling down on their investments in the weight-loss market. Speaking on the popularity of these drugs, Catherine Brown, vice president of clinical services at digital health firm Welldo, recently told Reuters that "We're imagining these medications may become so common that everybody's got a GLP-1 app ... right there on your phone next to your bank account." Forecasts from industry consultancy Grand View Research indicate that the GLP-1 drug market could grow by a compound annual growth rate of 18.54% between 2024 and 2030, expanding global market value from $13.84 billion to $48.84 billion. Low Health-Care Valuations Are Attracting Inflows Following President Trump's tariff announcements in April 2025—trade policies that weighed on imported pharmaceuticals—stocks in the health-care sector traded at notably low valuations, especially compared with the historically high valuations seen in tech and communication services stocks. Pfizer, for example, sports a trailing 12-month (TTM) price-to-earnings (P/E) ratio of 14.7, while health-benefits provider Elevance and Johnson & Johnson (NYSE: JNJ) have P/E multiples of 15.32 and 19.86, respectively. For context, tech favorites such as Palantir (NASDAQ: PLTR) and Tesla (NASDAQ: TSLA) have TTM P/E multiples of 421.11 and 290.53, respectively. It was only a matter of time until health care's lower ratios caught the eye of value investors looking for opportunities at the end of 2025 and into 2026. In November 2025, Mizuho's healthcare equity strategist Jared Holz told Barron's that "When you see money come out of a space, especially one that's filled with trillion-dollar [tech] companies, it really doesn't take much to get some of the underperforming sectors a little juice." Vanguard's VHT: A Basket of Undervalued Stocks The Vanguard Health Care ETF is up 2.30% this year after gaining more than 18% over the past six months. Much of those gains were fueled by rebounds and strong end-of-year performances from the fund's top holdings. Those positions include the ETF's top five holdings: Eli Lilly (NYSE: LLY), AbbVie (NYSE: ABBV), Johnson & Johnson, UnitedHealth, and Merck (NYSE: MRK). Drilling down further into the holdings, VHT also has allocations to Pfizer, CVS Health (NYSE: CVS), which acquired health insurance giant Aetna on Nov. 28, 2018, and the United States' largest hospital chain HCA Healthcare (NYSE: HCA). The ETF carries a negligible expense ratio of 0.09% while paying a dividend that currently yields 1.58%, or $4.64 per share annually. What Wall Street Thinks About VHT Based on analysts' ratings covering 23 companies in the VHT portfolio (representing 64.3% of its total), the fund receives a Moderate Buy rating. Perhaps the strongest indication of Wall Street's enthusiasm about the health-care sector is the ETF's current short interest of just 0.33% of the float—roughly 195,000 shares of the 60.17 million shares outstanding. That marks a nearly 37% decrease in short interest since the last reporting period.
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