The Goldman Sachs Future Health Care Equity ETF (GDOC), an actively managed fund, has shown robust performance recently, buoyed by a series of positive developments concerning its largest holding, Eli Lilly (NYSE: LLY). Over the past three months, the ETF has delivered a cumulative return of 11.8%, successfully reversing its weak start to 2026. Its price has also moved above the 50-day moving average, indicating positive short-term momentum.
As the fund's top holding with a weight exceeding 13%, Eli Lilly exerts a significant influence on GDOC's performance. This week, JPMorgan raised its price target for the stock from $1,300 to $1,400 while maintaining an Overweight rating. The firm anticipates a strong second-quarter earnings report, driven by increased international uptake of the weight-loss drug Zepbound and the diabetes treatment Mounjaro, alongside steady expansion in the U.S. obesity drug market. Similarly, Morgan Stanley lifted its price target to $1,347, expecting the company's Q2 earnings per share and revenue to surpass Wall Street estimates. RBC Capital Markets also expressed optimism, significantly raising its target from $1,250 to $1,500. RBC forecasts that Lilly's GLP-1 drugs will drive second-quarter sales above market expectations and increased its EPS forecasts for 2026 and 2027 to $37.10 and $49.33, respectively.
Beyond Eli Lilly, GDOC's second-largest holding, Johnson & Johnson (NYSE: JNJ), has also contributed positively to the fund's performance. With a year-to-date return nearing 30%, Johnson & Johnson has received a further boost from its medical technology division, which recently gained FDA approval for a novel heart catheter product.
GDOC employs an active management strategy, focusing on global healthcare innovation companies in areas like genomics, precision medicine, and digital health. The fund was launched in the fall of 2021 and is approaching its fifth anniversary. Looking ahead to the second half of the year, in addition to the fundamental drivers of its portfolio holdings, the healthcare sector could see a potential uptick in merger and acquisition activity if macroeconomic conditions improve and interest rates decline, which may provide additional support for the ETF.