XHS, which has almost $71 million in assets under management, allocates over 31% of its weight to health care facilities managers, bolstering the ETF’s status as a hidden gem play on Obamacare. Hospitals are the big winners in the Affordable Care Act because more people — up to 27 million – could end up buying insurance and going for procedures. Unlike in times past, the hospitals won’t have to do a lot of those procedures for free,” reports Eric Balchunas for Bloomberg.
Adding to the bull case for XHS is impressive estimated earnings growth for the health care sector this year.
“Thus far, health care companies within the S&P 500 Index generated and are expected to generate stronger first quarter earnings growth than initial Capital IQ consensus forecasts. As of April 28, first quarter earnings were expected to grow 4.2%, much better than the 0.8% expected decline as of the beginning of April. Full year 2014 earnings are now expected by Capital IQ consensus to climb 9.7%, higher than the 7.6% for the broader S&P 500 Index,” said S&P Capital IQ.
XHS, which charges 0.35% per year, is an equal weight ETF where no holding accounts for more than 2.44% of the fund’s weight. Top-10 holdings include Select Medical (NYSE: SEM), Tenet Healthcare (NYSE: THC), Community Health Systems (NYSE: CYH) and Universal Health Systems (NYSE: UHS). [Another Obamacare ETF Winner]
SPDR S&P Health Care Services ETF
