This week in options action in exchange traded funds we saw bearish put buyers present in assorted equity ETFs, including Health Care Select Sector SPDR Fund (NYSEArca: XLV).
This reflects some uneasiness that still exists regarding the equity markets among institutional portfolio managers.
We mention put buying in XLV but that has not stopped the healthcare ETF from attracting asset inflows this week. We have witnessed notable creation activity in the ETF this week, with the fund raking in over $1 billion in assets over the past few days (note the large volume spike on the chart below).
XLV is largely a way to get exposure to Big Pharma, as top holdings in the ETF are currently Johnson & Johnson (NYSE: JNJ) at 13.7%, Pfizer (NYSE: PFE) at 11.4%, Merck (NYSE: MRK) at 7.8% and Abbott Laboratories (NYSE: ABT) at 5.3%.
Other ETFs in the healthcare category that are constructed differently from XLV (which is based on the S&P Healthcare Select Sector Index) include Rydex Equal Weight Healthcare (NYSEArca: RYH), which is an equal weighted version of the same index and perhaps offers more even exposure across healthcare subcategories outside of Big Pharma including healthcare equipment and supplies, and healthcare providers and services.