How To Use ETFs To Invest In Health-Care Reform

scottburnsScott Burns, director of ETF analysis with Morningstar, released a video that looks at long and short ways to use health-care ETFs ahead of major reforms. Scott looks into the composition of a few of the broad health care sector ETFs and finds that they have about a 2/3 stake in pharmaceuticals. The Health Care Select Sector SPDR (XLV), iShares S&P Global Healthcare (IXJ) Vanguard Health Care ETF (VHT) are his examples of these ETFs, and he warns that these could run into problems with the proposed health care reform. He states that some of the details within the Obama places a bulls eye on the pharmaceutical companies eating at their profits. Generic drug makers could benefit from the reform, though there are currently no generic drug ETFs. Scott says to look at the iShares Dow Jones US Medical Devices (IHI) as it is insulated from the proposed health care reform, and could potentially benefit from the plan.

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