FXH vs VHT

FXHBFirst Trust Health Care AlphaDEX Fund

VHTAVanguard Health Care ETF

In short

FXH A 2007-vintage twist on health care: instead of owning the whole sector, FXH runs Russell 1000 health care names through First Trust's AlphaDEX growth-and-value screen and holds roughly 80 of them.

VHT The whole US health care sector in one ticket: roughly 400 stocks, an index that reaches well past the megacaps, and a nine-basis-point fee. Trading since 2004, it is one of the category's originals.

Stated mandate

FXH The fund seeks before-fee results generally corresponding to the price and yield of the StrataQuant® Health Care Index. That index uses the AlphaDEX® methodology to select and weight health care stocks from the Russell 1000® Index.

VHT The fund seeks to track a benchmark index measuring the investment return of health care stocks.

Why people hold it

• FXH AlphaDEX selects and weights health care stocks from the Russell 1000 using growth and value marks. A published rules screen, not a manager's hunch.ftportfolios.com
• Live since 2007 and now a multi-billion-dollar fund. This is a long-running strategy with a real record, not a recent launch chasing a theme.
• A focused book of about 80 stocks, so the screen's picks actually show up in results rather than getting diluted across the full sector. Pays quarterly.

• VHT Costs 0.09% a year while the typical fund in its health care peer group charges 0.50%. Same sector, a fraction of the toll.
• Roughly 400 holdings drawn from an investable-market index, so mid and small health care companies count too, not just the sector's giants.vanguard.com
• Two decades old, now a multi-billion-dollar fund, moderately traded, and it has hugged its benchmark closely. Pays out quarterly.
• On cost, tracking and tradability together, it stands among the strongest builds in a 24-fund health care cohort.

Worth knowing

• FXH The 0.61% fee runs near double the typical multifactor fund's. Cheap core peers like IUSG and VONV charge a small fraction of it.
• Thinly traded for its size, so spreads can widen and fills on a market order may land away from the fund's underlying value.
• Fee load and volatility profile leave it in the bottom quartile of its multifactor peer group, a group topped by broad, low-cost core funds.

• VHT FHLC and XLV each shave a basis point off the fee. If the fee line is your only tiebreaker, VHT is not the final word.
• One sector, one news cycle. Drug pricing rules, patent expirations and regulatory decisions can move the entire basket at once.vanguard.com
• Cap-weighted with a 25/50 diversification rule, so no single name can dominate outright, but the largest pharma and insurer positions still steer most of the ride.vanguard.com

Full FXH profile⁠

Full VHT profile⁠