Some areas in the market are showing signs of life, and the health care sector’s related exchange traded funds (ETFs) could be one such area.

In the last few years, health care stocks have performed relatively the same as their related ETF in the S&P, Health Care Select Sector SPDR (XLV), writes Ron DeLegge for ETF Guide.

Now, the sector is seeing increased activity with mergers and takeovers, and more buyout deals could be on the way. Health care stocks also have pretty enticing valuations with current P/E ratios of around or below 10 compared to the S&P 500’s 11.9 multiple. Watch the trend lines, though:  most of these funds are close to their short-term trend lines, and none have crossed their 200-days.

Interested in health care ETFs but don’t know of any? Well here are a couple for you to ponder over:

• iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH): down 8.6% year-to-date. The ETF is based on the Dow Jones Index and has 139 health care stocks. Stocks of companies are selected passively and weighted to their market capitalization or size, the medium size is just over $2 billion.

• Health Care Select Sector SPDR (XLV): down 10% year-to-date. It is made of health care stocks within the S&P 500. It is the largest health care ETF with around $2 billion in assets. Companies included deal in health care equipment and supplies, health care providers and services, biotechnology and pharmaceuticals. The health care sector, the second largest of the sectors,  is around 15% of the S&P 500’s overall sector weighting.

• Vanguard Healthcare ETF (VHT): down 9% year-to-date. VHT tries to mirror the MSCI US Investable Market Health Care Index. The ETF contains 297 holdings, each with a median market size of around $45 billion, and it is seen as the most diversified of the available health care ETFs.

• Rydex S&P Equal Weight Health Care ETF (RYH): down 5.4% year-to-date. RYH follows S&P 500 health care stocks, but it weights each stock equally. This usually causes a bias toward mid- and small-company stocks.

• PowerShares Dynamic Healthcare Sector Portfolio (PTH): down 11.1% year-to-date. PTH may be more useful for a portfolio strategy. It tries to outperform the performance of major health care equity benchmarks. Stocks are picked out by using a quantitative formula that looks for fundamental growth and valuation.

Read the disclaimer, as Tom Lydon is a board member of Rydex Funds.

Max Chen contributed to this article.

Tags: Biotechnology, ETF 101, Health Care, Indexing, IYH, Pharmaceuticals, PTH, RYH, S&P 500, Sector ETFs, VHT, XLV