Last year, Morgan Stanley identified Express Scripts, Cigna and Aetna as possible takeover targets. More Americans are enrolling into healthcare plans under the new Patient Protection and Affordable Care Act, or the so-called Obamacare Act, the 2010 law that requires all Americans to hold health insurance, further bolstering the case for healthcare providers stocks and ETFs like RYH. [M&A Boom Coming for This ETF]
RYH also features an almost 23% weight to healthcare equipment makers. Market observers argue that medical technology companies can tap into increased healthcare spending among emerging economies while the U.S. market has matured and could experience slower growth.
Additionally, a Republican controlled Congress could push through a bill to repeal a medical devices tax, potentially strengthening medical equipment companies and sector-related ETFs. The bill has passed the scrutiny of the Ways and Means Committee and moves to the House floor next. A repeal of the tax has passed the House three times already, and the Senate passed a nonbinding repeal in 2013. [Medical Device ETFs in Modest Post-Election Bounce]
Guggenheim S&P Equal Weight Healthcare ETF