Hedge Funds Snap Up Eli Lilly, United Healthcare, And More, Putting Healthcare ETFs Back In The Spotlight
Hedge funds appear to be rebuilding their defensive playbook, and perhaps the clearest tell is a subtle but broad rotation into heavyweight healthcare names. Recent 13F filings show renewed interest in large-cap pharma and managed-care stocks—a shift that could set up a fresh wave of inflows into healthcare ETFs after a largely tech-dominated year.
Hedge-fund positioning has been long mega-cap tech and AI infrastructure stocks for most of 2025, but stretched valuations and rising rate volatility have pushed managers to reintroduce ballast into their portfolios.
Data aggregated from 13Fs by HedgeFollow show that healthcare, with its recession-resistant cash flows, blockbuster drug pipelines, and steady insurance revenue, has been the preferred offset in Q3.
See Also: Hedge Funds Bet Big On S&P 500: SPY, IVV Dominate Q3 Buys
Big Pharma Leads The Move
Among the names drawing in institutional capital, Eli Lilly And Co (NYSE:LLY) and UnitedHealth Group Inc (NYSE:UNH) stand out.
Lilly’s surging demand for incretin-based obesity and diabetes drugs continues to drive exceptional earnings momentum. Several funds added to their LLY exposure in Q3, treating it as both a mega-cap resilience play and a secular growth story.
Meanwhile, UnitedHealth provides the kind of predictable revenue that hedge funds tend to crave in volatile periods. Q3 numbers reflected strong premium growth and stable margins-a combination making UNH a classic "risk-off but not bearish" pick.
Other widely accumulated names include Johnson & Johnson (NYSE:JNJ), Elevance Health Inc (NYSE:ELV), Thermo Fisher Scientific Inc (NYSE:TMO), all of which underscore a preference for scale, IP depth, and durable cash generation.
ETFs To Consider As The Rotation Builds
- Health Care Select Sector SPDR Fund (NYSE:XLV): This fund also represents the large-cap healthcare benchmark, the Health Care Select Sector Index, and closely tracks hedge-fund positioning, with heavyweight allocations to Lilly, UNH, and J&J. For investors looking for liquidity, XLV continues to be the destination of choice.
- VanEck Pharmaceutical ETF (NASDAQ:PPH): With a tighter, pharma-focused portfolio with high weights in Lilly, Novo Nordisk (NYSE:NVO) and Merck & Co Inc (NYSE:MRK) is poised to benefit if hedge funds continue to double down on blockbuster drug stories, especially obesity and oncology.
- Vanguard Health Care ETF (NYSE:VHT): For a more diversified play, VHT mixes big pharma, biotech, and services. Its wider exposure makes it suitable for investors that want both defensive stability and exposure to innovation cycles.
The Bottom Line
If hedge funds continue to recalibrate away from ultra-concentrated tech bets, healthcare ETFs may be one of the more reliable beneficiaries of Q4 positioning. The sector provides the rare mix of downside protection, earnings visibility, and secular drug-pipeline tailwinds-a combination that’s proving hard for smart money to ignore.
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