Obamacare’s medical device has, predictably, sent some industry members looking for ways to skirt the tax. Earlier this year, Medtronic (NYSE: MDT), IHI’s largest holding, announced it would acquire Covidien (NYSE: COV), another IHI top-five holding, for $40 billion. [Medical Device Marriage Helps This ETF]
Arguably, Medtronic targeted Covidien as much for its Ireland domicile as it did for its people and products.
To be fair, Obamacare has not proven damaging to the fortune of medical device ETFs. IHI and XHE are up an average of 53% over the past two years. The pre-election run-ups enjoyed by these ETFs could also be a sign that the market has efficiently priced in repealing the medical device tax, which could subject the funds to a “buy the rumor, sell the news” event if the tax is even scrapped.
SPDR S&P Health Care Equipment ETF
ETF Trends editorial team contributed to this post.