Currently, investors are looking for decreased volatility in their portfolios, which means the demand for healthcare stocks and related ETFs is picking-up. Pharma has a positive net percentage for stock advancers over stock decliners in the prior 3 months, meaning that there may indeed be a rising tide across the breadth of the pharmaceutical arena. With Swine flu being declared pandemic, the pharma stocks are likely to appreciate on the bourses. On the whole, more money is expected to flow into the sector. 

So, which healthcare ETFs should you invest? 

We leave it to the investors to decide which healthcare ETFs they should invest in. But, we bring you, some of the best performing and worst performing healthcare ETFs. Rating of ETFs as best or worst performing is only a relative measure (based on NAV returns in the first five months of 2009) among the selected six ETFs. 

Best performing 

Rydex S&P Equal Weight Health Care ETF (NYSEArca: RYH) 

This ETF shadows healthcare stocks within the S&P 500, but with a twist. Instead of weighting the companies by their market capitalization or size, it weights each stock equally. The net effect of equal weighting a stock index is a bias towards mid and small company stocks. 

In 2008, RYH declined by 26.66% compared to a 38.49% fall in the S&P 500. However, in the first five months of 2009, RYH saw a gain of 8.95% only. Each one of the 54 stocks within RYH receives an equal weighting and the underlying index is rebalanced every quarter. RYH's annual expense ratio is 0.50%. 

iShares Dow Jones U.S. Healthcare Sector Index Fund (NYSEArca: IYH) 

The Dow Jones index behind this particular ETF follows contains market exposure to 139 healthcare stocks. Companies within the index are selected passively and weighted according to their market capitalization or size. The median market size of healthcare stocks within IYH is just over $2 billion. 

In 2008, IYH declined by 23.10% compared to a 38% fall in the S&P 500 (AMEX: SPY) and a 33.8% decline in the Dow Jones Industrial Average (AMEX: DIA). However, till date in 2009, IYH saw a decline of only 1.34% only. Johnson & Johnson with 12.62%, Pfizer (NYSE: PFE) with 9.27%, and Abbot Laboratories (NYSE: ABT) with 6.04% represent the fund's three largest holdings in order. IYH's annual expense ratio is currently 0.48%.  

Vanguard Healthcare ETF (NYSEArca: VHT) 

The Vanguard ETF follows the MSCI US Investable Market Health Care Index. This particular healthcare ETF is the most diversified among similar offerings and currently has 297 stocks.