The healthcare fund got a boost after President Barack Obama won a second term in the election, making healthcare reform appear more secure. [Healthcare ETFs: A Post-Election Buying Opportunity?]
However, the ETF has been choppy in recent weeks within a trading range. A breakout would take XLV to new all-time highs. [ETF Spotlight: Healthcare and the Affordable Care Act]
Goldsborough at Morningstar points out that the ETF is tilted toward Big Pharma firms, which comprise about half the portfolio. “Thanks to its heavy concentration, the fund is heavily leveraged to the pharmaceutical industry’s unique risks, such as patent expirations, generic competition, and government regulation,” he said.
Health Care Select Sector SPDR
