5 Top Performing Stocks Of The Best ETF Of 1H2018

PowerShares S&P SmallCap Healthcare Fund PSCH topped the list of the best performing equity ETFs of the first half of 2018, with impressive returns of about 30.6%. The rally was mainly driven by tax reform, rising M&A and positive regulatory backdrop.

The new tax legislation has enabled large pharmaceutical companies to bring offshore cash back home at reduced tax rates of 8-15.5% instead of the prior 35%. The repatriated money has led to an increase in mergers and acquisitions activity, share buybacks and dividends. Additionally, the slower growth in mature drugs has also compelled prominent biotechs to acquire smaller ones with promising pipelines, even at hefty premiums.

Further, Trump’s most-awaited plan to lower drug prices has added to this strength. If these were not enough, the sector’s non-cyclical nature is an advantage in the current market, which is ruffled by trade war fears, tariff concerns and geopolitical tensions. Moreover, the fund’s small cap focus provided a huge boost, given that the pint-sized stocks are well insulated from these headwinds. These stocks are considered safe and better plays if any political issue or economic turmoil creeps into the picture (read: 4 Sector ETFs Braved Trade Turmoil in Q2).

Let’s take a closer look at the fundamentals of PSCH.

PSCH in Focus

This fund provides exposure to the health care sector of the U.S. small cap segment by tracking the S&P SmallCap 600 Capped Health Care Index. Holding 72 securities in its basket, the fund is widely diversified across components with each holding less than 4.5% share. From an industrial look, healthcare equipment & supplies, and healthcare providers & services take the top two spots at 27.7% share each followed by biotechnology with 22.1% allocation.

The product has amassed $758.2 million in its asset base and trades in a moderate average daily volume of around 57,000 shares. It charges 29 bps a year from investors and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: 5 Hottest Small-Cap ETFs of 2018).

Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars, having gained more than 70%. Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:

Best Performing Stocks of PSCH

Tabula Rasa HealthCare Inc TRHC 

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