Be Fit? An ETF for Health & Fitness

10/20/2020 5:00 am EST

Focus: ETFS

Jim Woods

Editor, Successful Investing, Intelligence Report

The Global X Health & Wellness Thematic ETF (BFIT) seeks to harness the effects of changing consumer lifestyles by investing in companies geared toward promoting physical activity and well-being, asserts Jim Woods, editor of The Deep Woods.

The fund aims to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Health & Wellness Thematic Index.

BFIT enables investors to access high-growth potential through companies at the leading edge of a long-term, health and wellness trend affecting multiple sectors of the global economy.

Composition of the ETF transcends classic sector, industry and geographic classifications by tracking an emerging theme. In a single trade, BFIT delivers access to dozens of companies with high exposure to the health and wellness sector.

Only 41% of the fund’s portfolio is invested in U.S. companies. BFIT’s other holdings are in foreign emerging markets. This strategy reflects that many industry powerhouses are based elsewhere.

For example, Puma SE and Adidas AG are headquartered in Germany; Shimano and Asics Corp. are in Japan and Fila Holdings Corp. is in South Korea. 

This exchange-traded fund provides diversification domestically and across the globe. Better yet, no individual stock represents more than 4% of the portfolio. The fund has $19.6 million in assets under management, a 0.35% average spread and 58 holdings.

BFIT currently trades around $23 and has a 0.55% dividend yield. The fund has been growing steadily since its inception in May 2016. It is up more than 50% since then, and with an increasing interest in healthy living and general wellness, the fund looks poised to continue growing higher.

The health and wellness ETF tracks an index of equities from companies that promote physical well-being. Its universe of holdings includes small-, mid- and large-cap public companies from developed countries that earn the majority of their revenue from the market niche or whose stated business objective relates to good physical health.

Health and wellness crosses the sector boundaries found in traditional classification systems to include nutrition and weight loss, nutritional supplements, fitness equipment and apparel, among others.

BFIT has a high expense ratio (0.75%) in comparison to other exchange-traded funds and, as a health and wellness fund, has a very different investment strategy than others in this segment.

I urge interested investors to exercise their own due diligence in deciding whether this fund fits personal portfolio goals and risk tolerance.

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