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The iShares U.S. Healthcare ETF (IYH) has posted a year-to-date return of 12.07%, heavily influenced by its 14.12% allocation to Eli Lilly.
The healthcare sector posted significant gains, largely driven by positive clinical trial data from Eli Lilly for its obesity drug, retatrutide. This rally occurred within a broader market rotation as investors shifted from technology stocks into value-oriented sectors following a less hawkish update from the Federal Reserve.
While a select group of S&P 500 stocks delivered extraordinary gains in 2025, averaging 145% year-to-date, analysis reveals significant vulnerabilities for certain tech leaders. Investors are beginning to differentiate between business models, favoring recurring revenue streams over those dependent on cyclical capital expenditures, signaling a potential market shift.