Healthcare Sector Review January 2026
This should be a good time to set markers in anticipation of earnings and after a sell-off in health insurance stocks as well as severe re-balancing in Technology and Precious metals trade. So with technology stocks hit by Microsoft the IGV is down 12.7% YTD, and down 10.83% over one year.The XLV is having a quiet day kinda flat at $154, down 0.63% YTD, up 5.6% over one year.
The XLV is overweight large cap biopharma with following top holdings: LLY, JNJ, ABBV, UNH and MRK. If you looked at healthcare funds 6 months or a year ago the top weighting was probably UNH and you know the story. After those top five positions you have another 10% in what I call Health Sciences TMO and MedTech with ISRG, ABT. So digging a little deeper into healthcare stocks;
Health Insurance and Providers: The worse group YTD after a big down day yesterday, the U.S. Healthcare Providers (IHF) is down 4.65% YTD and down13.23% over one year, About 50% of holdings includes : CVS, UNH and Elevance (ELH). Probably bottomed but with dividends only at 2% maybe its a hold.
MedTech: Is having a disappointing year with my Top 3 Holdings YTD and One year: ABT at $106 down 15.3% YTD, down 17% one year; ISRG at $107.5 down 10.4% YTD down 11.38% one year, BDX at $201 up 3.6% YTD down 18.5% one year. The IHI is is down 4.26% YTD and down 7% over one year.JNJ at $227could be considered a hybrid medtech /biopharma and it is a major outperformer up over 50% over one year.
Biopharmaceuticals; The IBB at $174.25 is up 3.25% YTD and 26.7% over one year; the equal weighted more volatile XBI is at $126.73 and is up 3.94% YTD and 36.9% over one year. FBIOX is up 34% over one year. SMID movers to watch from our trading list: ABOS, AXSM, BBIO, DNTH.
We will update large cap biopharma after all earnings are out. Our focus for now would be rebalancing our portfolios and trading SMID biotechs.