Some IHI constituents have fought back in unique ways. For example, Medtronic (NYSE: MDT) said in June that it will acquire rival Covidien (NYSE: COV) for about $40 billion. Medtronic will ditch its long-standing Minnesota base for a headquarters in Ireland to trim its tax tab to Uncle Sam. Medtronic and Covidien are IHI’s largest and fourth-largest holdings, respectively, combining for 17.3% of the ETF’s weight. [Medical Device Marriage Good for This ETF]
Beyond the tax wranglings, there are reasons to consider IHI, even after this epic run. Some market observers see upside to $75 over the next 12 to 18 months for St. Jude Medical (NYSE: STJ). The stock, which currently trades trade at a noticeable discount to some IHI constituents, currently trades just over $64.
In late August, Barron’s said Thermo Fisher Scientific (NYSE: TMO) could rise 20% over the next year. Thermo Fisher and St. Jude combine for about 12% of IHI’s weight.
iShares U.S. Medical Devices ETF
ETF Trends editorial team contributed to this post.