You would think that the Health Care sector (XLV) would be one of the best performing areas of the stock market during a global pandemic. While Health Care was a top performer early on during COVID, the sector has been seriously lagging the broad market lately.

Nothing stands out too much in the price chart (first chart below) of the Health Care ETF (XLV) as it is still in a solid uptrend and in fact making new all-time highs. It’s the chart that compares XLV to the S&P 500 that does stand out. In the second snapshot below, we provide relative strength charts of the eleven major sectors versus the S&P 500. A rising line indicates outperformance versus the broad market while a falling line indicates underperformance. As you can see in the yellow highlighted chart for Health Care, the sector has recently given up all of the gains it made versus the market early on during COVID. From late February through the end of April, Health Care dramatically outperformed, but its relative performance has slowly and steadily trended lower since then. The chart almost looks like the COVID case curve in the NYC region! At this point, the Health Care sector is performing right in line with the S&P 500 over the last year.  

(Click on image to enlarge)