“Although healthcare is often viewed as a defensive sector, our [market weight]recommendation, amid a challenging economic environment, reflects several factors that could adversely impact the sector, including potentially lower profitability due to costs and taxes associated with healthcare reform, along with various sub-industry specific challenges and issues,” Loo wrote.
“However, we note that the impact from healthcare reform remains uncertain as several key provisions have not yet been implemented,” the analyst added. “Current legal challenges regarding the constitutionality of certain provisions have resulted in split decisions in the federal appellate courts, thereby increasing the likelihood of a Supreme Court hearing, which we anticipate occurring in 2012.”
Healthcare sector ETFs include:
- Health Care Select Sector SPDR Fund
- iShares Dow Jones US Health Care Sector (NYSEArca: IYH)
- Vanguard Health Care (NYSEArca: VHT)
Health Care Select Sector SPDR Fund
Tisha Guerrero contributed to this article.