XLVETF

The article recommends three ETFs as defensive investments if a stock market crash occurs: the Schwab U.S. Dividend Equity ETF (SCHD) for its 3.3% dividend yield and quality holdings in consumer staples and healthcare; the State Street Health Care Select Sector SPDR Fund (XLV) for its resilience during market downturns; and the State Street SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) for capital preservation and reliable income, following Warren Buffett's strategy of holding short-term Treasuries during uncertain times.

Healthcare sector is experiencing a significant rebound, with ETFs hovering near 52-week highs driven by double-digit earnings growth expectations, positive clinical trial results, attractive valuations, and expanding GLP-1 adoption. Major pharmaceutical companies reported promising drug-trial outcomes in oncology, obesity, and rare diseases, while M&A activity surged to nearly $284 billion. The sector is benefiting from a rotation out of overcrowded AI/tech trades into defensive growth.

VHT, a passively managed healthcare ETF with $20.15 billion in assets, offers broad exposure to the healthcare sector with a low expense ratio of 0.09% and a Zacks ETF Rank of 1 (Strong Buy). The fund has delivered strong performance with returns of 16.92% year-to-date and 24.95% over the past year, making it an attractive option for long-term healthcare investors seeking diversified exposure.

FXH is a passively managed healthcare ETF launched in 2007 with $1.13 billion in assets. It tracks the StrataQuant Health Care Index with a 0.61% expense ratio and 0.56% dividend yield.

The fund has gained 16.87% year-to-date and 20.02% over the past year, with a medium risk profile (beta 0.72). It holds 74 healthcare companies with top holdings including Natera, Guardant Health, and Universal Health Services. FXH received a Zacks ETF Rank of 3 (Hold).

Wall Street rallied on Thursday with all three major indexes closing in the green, driven by a rotation into defensive sectors like healthcare, materials, and financials. Investors shifted away from debt-sensitive AI and technology stocks as Treasury yields fell. The Dow Jones jumped 1.1%, the S&P 500 added 0.3%, and the Nasdaq gained 0.1%, while economic data showed mixed signals with jobless claims rising slightly and PPI inflation at 1.3%.

U.S. stock markets closed higher on Wednesday with the Dow rising 0.7%, Nasdaq and S&P 500 each gaining 0.2%. Federal Reserve officials project another rate hike by end of 2026 but remain divided on timing amid economic uncertainty. Consumer credit growth fell short of expectations in August.

U.S. stock markets ended Thursday's volatile session in positive territory as Treasury yields retreated from 24-year highs, boosting investor sentiment. The Dow, Nasdaq, and S&P 500 all gained modestly.

Micron Technology reported exceptional fourth-quarter earnings with non-GAAP EPS surging 11-fold year-over-year, driven by strong AI demand and tight memory conditions. Economic data showed manufacturing activity remained in expansion territory while jobless claims fell below expectations.