Can Healthcare ETFs Stay Hot In 2014? [Health Care SPDR (ETF), Vanguard Health Care ETF, iShares Dow Jones US Healthcare (ETF)]

The space remains a huge beneficiary of this legislation. The Obamacare act was aimed at bolstering the number of insured Americans, which in turn should boost demand for the Pharma and Medicare industry as a whole.

Though the launch of the program had to survive a whole lot of political and technological issues, finally things have fallen into place. More and more people are buying this health insurance plan on exchanges sending the level of uninsured populace to the lowest point since 2009. Apart from this, surging merger and acquisition activities, higher demand in emerging markets, and an aging population are largely helping the sector.

For this reason, Health Care Select Sector SPDR Fund (NYSEARCA:XLV) has increased its asset base by $770.7 million in last one month, taking a spot in the top-10 assets gatherers’ list. Other healthcare ETFs like iShares U.S. Healthcare ETF (NYSEARCA:IYH) and Vanguard Healthcare ETF (NYSEARCA:VHT) attracted $471.4 million and $320.7 million in assets in the said period (read: 3 Top Ranked Healthcare ETFs in Focus).

Bottom Line

Having said this, we would like to note that this rotation might just be a short-term trend. While we really do not expect the healthcare sector lose momentum this year, Industrial ETFs might come out of this difficult scenario. The picture will be clearer when we are fully able to discard the weather-related distortions and see a steady pickup in the global economy.

This article is brought to you courtesy of Eric Dutram.

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