Health care exchange traded funds (ETFs) have been one of the market’s worst-performing segments in the last month. Although that performance may be because some feel health care will get killed by legislation, there could be another reason for it.

Gary Gordon for ETF Expert gives us two reasons why the sector has lagged in recent weeks:

  • Health care is a defensive segment, and typically produces both smaller declines in corrective phases as well as smaller surges in recoveries. [Health Care ETFs for an Uncertain Future.]
  • Uncertainty about the state of health care reform has watchers tied up in knots – just turn on the nightly news.

Whether there’s a law or not, Gordon says, it’s that uncertainty that could be keeping investors at bay for now. [Biotech ETFs for Any Risk Appetite.]

Once the new rules and outline of the health care sector are clearly defined, health care stocks and ETFs may actually begin to do better and investors could be pleased. Why? Health care stocks are cheap, it’s been on a steady uptrend and is above the 200-day moving average, and whatever the outcome, you’ll soon know how to proceed. [Regional Banks, Health Care In Favor.]

For more stories about health care, visit our health care category.

  • iShares Dow Jones U.S. Healthcare Providers Index Fund (NYSEArca: IHF)
  • Health Care Select Sector SPDR (NYSEArca: XLV)
  • iShares Dow Jones U.S. Health Care Sector Index (NYSEArca: IYH)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.