The weight of the health care sector in a given ETF can vary dramatically. In the S&P 500 SPDR Trust (SPY), health care accounts for about 12%. In contrast, First Trust Dividend (FDL) commits roughly 30% to the segment. Naturally, there are specific sector and sub-sector funds that provide 100% exposure. There’s 100% health care for the broader S&P 500 SPDR Select Health [...] [...more]
The end of legislative uncertainty on health reform was supposed to open the door for a wave of buying interest for stock assets. With few exceptions, however, investors have continued to shy away from Health Care ETFs. The case for pharma as well as for medical devices seems pretty strong on the surface. An aging population plus [...] [...more]
Over the last 6 weeks, downward momentum has accelerated, volatility has increased and bullishness has disappeared. No doubt about it… this is a custom-made environment for extreme bearishness. However, doom-n-gloomers may want to tame their own irrational exuberance. The vast majority of stock markets around the world aren’t down 20% in their local currencies, meaning that most stock markets… so far… [...] [...more]
In general, I believe that certainty breeds investing success. So even if the long-term ramifications on large-scale health care legislation is poorly understood, the near-term certainty of passage should have produced market-beating gains for Health Care ETFs. Beyond my certainty-uncertainty reasoning, you also have traditional undervaluation in a lot of health care stocks. You have a large number of M&A transactions in [...] [...more]
Over the last month, the single worst performing S&P Sector ETF was the SPDR Select Health Care (XLV). It picked up a mere 3% whereas the S&P 500 (SPY) picked up 7%. The reasons may be two-fold: (1) Health care is a defensive segment, and typically produces both smaller declines in corrective phases as well as [...] [...more]
For roughly 6 months circa 9/10/2008 – 3/9/2009, the market averaged a 1% gain or loss each day. Of course, most of those particular sessions were losses for the investing public! Yet volatility has come back down to earth from the stratosphere. Now… we may be accustomed to 1% moves on a single day… but are we really accustomed to seeing [...] [...more]
There have been plenty of bullish voices pining for Healthcare ETFs in 2009. For instance, as recently as June, Morningstar exclaimed that the Vanguard Health Care Fund (VHT) was undervalued by 44%. Still others have argued in an anecdotal fashion. For example, any health bill that increases insurance coverage could mean more patients at doctor offices and more prescriptions at pharmacies. Of [...] [...more]
All of this talk about health care reform… and yet, very little talk about health care as a profitable sector for investors. I have discussed the extremely impressive run for biotechnology throughout the bear market, however. (See “Biotech ETFs Lift Portfolios Higher Than Broad-Based Health Care ETFs and/or “Pharma ETFs, Biotech ETFs Are Benefiting From Swine and [...] [...more]
