Vanguard Health Care ETF (VHT): Complete Beginner's Guide
Last updated: March 2026 • Vanguard • Health Care
Expense Ratio
0.10%
AUM
$15.0B
Dividend Yield
1.30%
Inception
2004
Beginner Score
9.5/10
What is Vanguard Health Care ETF?
VHT provides broad exposure to the U.S. health care sector, including pharmaceutical companies, biotech firms, medical device makers, hospitals, and health insurers. Health care is considered a defensive sector because people need medical care regardless of economic conditions. This fund covers the full health care ecosystem, from drug discovery to patient care delivery.
VHT is managed by Vanguard and has been available since 2004. With $15.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.10%, which means for every $10,000 you invest, you pay approximately $10 per year in management fees.
VHT at a Glance — Key Metrics
| Expense Ratio | 0.10% |
| Total Holdings | 418 |
| P/E Ratio | 22.8 |
| Beta | 0.78 |
| Dividend Yield | 1.30% |
| AUM | $15.0B |
| Inception Year | 2004 |
| Issuer | Vanguard |
Top 10 Holdings in VHT
VHT holds 418 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | UnitedHealth Group | UNH | 9.00% |
| 2 | Eli Lilly & Co. | LLY | 8.00% |
| 3 | Johnson & Johnson | JNJ | 6.00% |
| 4 | AbbVie Inc. | ABBV | 5.50% |
| 5 | Merck & Co. | MRK | 5.00% |
| 6 | Thermo Fisher Scientific | TMO | 4.00% |
| 7 | Abbott Laboratories | ABT | 3.50% |
| 8 | Pfizer Inc. | PFE | 3.00% |
| 9 | Danaher Corp. | DHR | 2.80% |
| 10 | Intuitive Surgical | ISRG | 2.50% |
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VHT Performance History
Here's how VHT has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
2.00%
1 Year
10.00%
3 Year
5.00%
5 Year
9.00%
10 Year
10.00%
Beginner Suitability Score: 9.5/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
VHT scores 9.5/10 because it has very low fees, shows lower-than-average volatility, offers broad diversification across 418 holdings, and has been available since 2004, giving it a proven track record.
How to Buy VHT — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "VHT" — Use the search bar in your brokerage platform to find Vanguard Health Care ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
Dollar Cost Averaging Into VHT
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With VHT's expense ratio of 0.10%, a $10,000 investment would lose approximately $856 to fees over 20 years compared to a zero-fee investment. This is a reasonable fee level for the value provided.
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Pros and Cons of VHT
Pros
- ✓Defensive sector with steady demand regardless of economic conditions
- ✓Over 400 holdings provide exceptional breadth across all health care sub-sectors
- ✓Aging global population creates a long-term structural tailwind for the sector
- ✓Largest Vanguard sector ETF by AUM, reflecting broad investor confidence
Cons
- ✗Regulatory and political risk from drug pricing reform and health care policy changes
- ✗Biotech holdings can be volatile due to clinical trial successes and failures
- ✗Patent expirations on blockbuster drugs can significantly impact pharmaceutical stocks
Frequently Asked Questions
Is VHT a good ETF for beginners?▾
VHT has a Beginner Suitability Score of 9.5/10 on our scale. This makes it a strong choice for new investors due to its low fees and broad diversification.
What is the expense ratio of VHT?▾
VHT has an expense ratio of 0.10%. This means for every $10,000 you invest, you pay approximately $10 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in VHT?▾
You can invest in VHT with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does VHT pay dividends?▾
Yes, VHT pays dividends with a current yield of approximately 1.30%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in VHT?▾
The top holdings in VHT include UnitedHealth Group (9.00%), Eli Lilly & Co. (8.00%), Johnson & Johnson (6.00%), and more. The fund holds 418 total positions, providing broad diversification across many companies.