Health care stocks and exchange traded funds (ETFs) paled last year, but the prognosis for this year is healthy, based on a steady recovery.  The sector is expected to report steady growth and have the highest median earnings growth rate of 15.8% for 2007, reports Trang Ho of Investor’s Business Daily.  In the first quarter, health care year-over-year earnings grew 13.6%.  Americans are willing to spend when it comes to health care and it is not an economically sensitive industry, so it can be good for a slow growth environment.  Worldwide drug sales are projected to double by 2020, as the newly rich countries could account for 20% of the global drug sales.

ETF provider, XShares, offers investors a family of ETFs, called HealthShares, which focus on specific areas of treatment.  There are numerous other ways to invest in health care through ETFs, including (but not limited to):

  • SPDR S&P Biotech (XBI)
  • PowerShares Dynamic Health Care Services (PTJ)
  • Rydex S&P Equal Weight Health Care (RYH)
  • iShares Dow Jones U.S. Health Care (IHF)
  • iShares S&P Global Health Care (IXJ)
  • Pharmaceutical HOLDRs (PPH)

Read the disclosure, as Tom Lydon serves on the board for Rydex Investments.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.