ETF Expert

I can think of several themes that the mainstream media have been pushing heavily over the past few years. How have some of those themes been working out?

1. Life-changing Innovation in Health Care. When you combine the aging of the U.S. population with therapeutic implementation in pharmaceuticals, life sciences and biotechnology, you get two dozen exchange-traded funds in ultra-focused areas. Cancer, cardiology, diagnostics, devices — these are just a few of the razor-thin ETFs provided by HealthShares.

Some of the HealthShare ETFs have performed better than others since inception. However, there is the HealthShares™ Composite ETF (HHQ) that holds 80 of the larger companies tracked by all of the other HealthShare offerings combined. In the end… I imagined that this wouldn’t be much different than investing in the highly-traded, highly-regarded Vanguard Health Care Fund (VHT).

In many ways, my vision was correct. Since HHQ began trading, you seemed to be getting identical price movement between HHQ and VHT… only HHQ is far more expensive and thinly traded. So why invest in it?

Well, it’s possible that the people at HealthShares may know a little something that I don’t. It appears that the HealthShares™ Composite ETF (HHQ) has held up a little better during the global panic over credit, and has distanced itself slightly from its competitor, the Vanguard Health Care Fund (VHT).

The performance discrepancy may seem small at this point… but it is certainly something to keep an eye on.

2. Nanotech Is Hot? Not Exactly. In fact, few investment introductions received as much attention as the launch of the Powershares Lux Nanotech Fund (PXN). And yet, how has it really fared versus broader-based, Select SPDR Technology (XLK) over the last 22 months?

Look before one leaps? Have a longer-term perspective?

Perhaps, one should sift through the hype, as well as have a plan to sell if the vision of the future does not mesh with an investment. (Investors in "Clean Tech," "Green" and "Alt Energy" take note!)

Disclosure Statement:  As a Registered Investment Advisor, Pacific Park Financial, Inc. may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.