Healthcare: Winning Sector ETF Amid Soft U.S. July Jobs Report

Core Insights - U.S. nonfarm payrolls increased by only 73,000 in July 2025, significantly below the expected 110,000, indicating a slowdown in the labor market [1] - Job growth in the healthcare sector was robust, adding 55,000 positions, primarily in ambulatory health care services and hospitals [2][4] - Most other major sectors showed little change in employment levels, suggesting a lack of broad-based job growth [3] Sector in Focus - The healthcare sector's job growth in July exceeded the average monthly gain of 42,000 over the previous year, highlighting its strength in the current labor market [4] - Ambulatory health care services contributed the most to job gains within healthcare, adding 34,000 positions, followed by hospitals with 16,000 [4] ETFs in Focus - Health Care Select Sector SPDR ETF (XLV) offers exposure to the healthcare sector, with significant allocations to pharmaceuticals and healthcare providers, and holds a Zacks Rank 1 (Strong Buy) [5] - iShares U.S. Healthcare Providers ETF (IHF) focuses on healthcare providers and services, charging 40 bps in fees, and currently holds a Zacks Rank 3 (Hold) [6] - Vanguard Health Care ETF (VHT) tracks the MSCI US Investable Market Health Care Index, charges 9 bps in fees, and also holds a Zacks Rank 1 [7] Stocks in Focus - HCA Healthcare (HCA), the largest non-governmental operator of acute care hospitals in the U.S., has a trailing four-quarter earnings surprise of 7.02% on average and holds a Zacks Rank 3 (Hold) [8] - Welltower (WELL), a REIT focused on senior housing and health systems, has a trailing four-quarter earnings surprise of 4.22% on average and also holds a Zacks Rank 3 [9] - Omega Healthcare Investors (OHI), a self-administered REIT investing in long-term care facilities, has a trailing four-quarter earnings surprise of 2.07% on average and holds a Zacks Rank 3 [10]