Milliman, a company known for healthcare consulting, is introducing two new exchange-traded funds (ETFs) focused on healthcare costs. Adam Schenck, a principal at Milliman, explained that these ETFs aim to address the consistently rising costs of healthcare in the U.S.
The first ETF, the Milliman Healthcare Inflation Guard ETF (Ticker: MHIG), is designed to match healthcare cost inflation. The second, the Milliman Healthcare Inflation Plus ETF (Ticker: MHIP), targets returns that exceed healthcare inflation by about 2%. Schenck emphasized that healthcare cost inflation is a stable area, making it an appealing target for investment.
These ETFs combine investments in healthcare-related stocks with alternative assets, primarily gold. They also include fixed-income securities like government bonds. Building these funds leverages Milliman’s extensive data on healthcare costs, drawn from about 35 million insured lives, which represents around 20% of the U.S. commercially insured population. According to Schenck, this data is vital for tailoring their investment approach.
Investors can use these ETFs within Health Savings Accounts (HSAs), 401(k) plans, and individual retirement accounts (IRAs). There’s notable growth in HSAs, which reached $159 billion in assets across 40 million accounts by mid-2022, according to Devenir. This growth underscores the importance of investing in healthcare, especially as more people seek to prepare for medical expenses in retirement.
The global ETF market is thriving as well. As of now, it’s valued at nearly $19.85 trillion, with projections of reaching approximately $20 trillion by 2030. This expansion indicates increasing investor interest in diversified investment options.
To assist individuals in planning for healthcare costs in retirement, Milliman has also released a Retirement Healthcare Cost Calculator. This free tool helps users estimate potential medical expenses, providing essential insights.
As healthcare costs continue to rise, investors and advisors might find these new ETFs a useful option in their portfolios. By taking advantage of robust data and a strategic investment approach, Milliman aims to navigate the complex landscape of healthcare financing.
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