Image source: TBIT via pixabay.

While November was largely a good month to be a healthcare-focused investor, a few of the more popular exchange-traded funds that focus on the sector were left behind. One ETF, in particular, the iShares Dow Jones US Healthcare Providers ETF (NYSEMKT:IHF), lagged the returns of the S&P 500 and ended the month lower than it began.

IHF Chart

So what caused this ETF to turn out a negative return on an otherwise-positive month?

Top holdings
Unlike other healthcare-focused ETFs that invest the bulk of their assets in pharmaceutical or biotech stocks, the iShares U.S. Healthcare Providers ETF concentrates its assets in the lower-risk end of the sector. That means that this ETF primarily invests in the stocks of health insurers, healthcare service providers, and healthcare facilities. Those types of stocks tend to be slow-and-steady performers that provide investors with good returns without the crazy volatility of other healthcare ETFs.

Like most ETFs, this fund gives its investors instant diversification -- the fund counts 53 different companies among its holdings. However, this fund is fairly concentrated, as a sizable percentage of its assets are invested in just a handful of names.

A quick glance at its list of its top holdings:

CompanySymbol% Assets
UnitedHealth Group UNH 13.08
Express Scripts Holdings ESRX 8.83
Cigna CI 6.34
Aetna AET 6.16
Anthem ANTM 6.08
Humana HUM 4.96
HCA Holdings HCA 4.19
Laboratory Corporation of America LH 3.38
DaVita Healthcare Partners DVA 3.20
Universal Health Services UHS 2.90

Data source: iShares. 

As you can tell, this fund has a huge percentage of its assets -- 45.55%, to be exact -- invested in health insurance stocks, so when the health insurance sector catches a cold, as it did last month, this fund has a tough time keeping up with the market. 

Two of this funds top holdings, health insurers Aetna (NYSE:AET) and Anthem (NYSE:ANTM), had an especially rough November:

AET Chart

Both of these companies stocks were pounded when another giant insurer, UnitedHealth Group (NYSE:UNH), released news that it was updating its earnings guidance for 2015. UnitedHealth Group told investors that it was lowering its earnings guidance for the year due to higher-than-expected loses from its individual exchange-compliant products, which it introduced to the market earlier this year. 

Aetna and Anthem each operate individual exchange products, and both companies have more members than UnitedHealth Group does. Thus, if UnitedHealth Group was experiencing earnings pressure from its exchange products, it's likely that Aetna and Anthem would as well.

Can the IHF bounce back? 
While November was a month for the IHF to forget, I wouldn't call this ETF out just yet. It's already showing signs of a resurgence and was the top-performing ETF during the first week of December. This ETF's focus on the lower-risk end of the healthcare spectrum should also help it hold up well when the market once again sours on biotech and pharmaceutical stocks. Add in the fact that this ETF has proven itself to be a long-term winner, and I think investors will do just fine by sticking with this ETF.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.