Active healthcare ETF TMED up 18.6% in first half

T. Rowe Price’s Health Care ETF (TMED) rose 18.6% year-to-date through June, compared with a 5.7% gain for the S&P Health Care Select Sector index. A sharp rise in June contributed to the fund’s first-half return.

The ETF is actively managed by T. Rowe Price and carries a 44-basis-point fee. Managers use fundamental research and a bottom-up stock selection process, drawing candidates from global companies classified in the MSCI GICS health care sector.

The strategy covers pharmaceuticals, biotechnology and medical devices and can overweight growth or value names based on company fundamentals rather than index weights. TMED has outperformed the ETF Database Health and Biotech Equities category average so far this year.

Eli Lilly (LLY) is the fund’s largest holding. Lilly’s shares rose about 4.6% over the past month amid sustained demand for GLP-1 treatments including Mounjaro and Zepbound, a factor highlighted by analysts.

Portfolio managers have adjusted sector and stock exposure in response to market conditions and interest-rate expectations. Some market participants expect rates to remain steady through this year, with the possibility of cuts in 2027.

TMED’s holdings concentrate in healthcare subsectors rather than the largest technology and artificial intelligence mega-cap stocks that dominate many indexes. The ETF’s active approach, recent performance and 44-basis-point fee are points investors and advisers are monitoring as the fund moves into the second half of the year.