As the Affordable Care Act adds millions into the healthcare system, the increased demand for health products and services are supporting the momentum in healthcare-related exchange traded funds.
The healthcare sector has been among the best performing area in U.S. markets, with Health Care Select Sector SPDR (NYSEArca: XLV) up 12.0% and iShares U.S. Healthcare ETF (NYSEArca: IYH) 13.0% higher year-to-date.
Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, recommends investors should look into healthcare stocks as “plays on Obamacare,” reports Matt Clinch for CNBC.
Specifically, Golub pointed to innovative drug companies and the biotechnology subsector.
Investors can also dive deeper into the healthcare sector and focus on individual segments. For instance, the iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB) is the largest biotech ETF by assets.
ETF investors can also target pharmaceutical names through broad options like the Market Vectors Pharmaceutical ETF (NYSEArca: PPH), SPDR Pharmaceuticals ETF (NYSEArca: XPH) and iShares U.S. Pharmaceuticals ETF (NYSEArca: IHE).
Additionally, there are a number of specialized options available. For instance, the ALPS Medical Breakthroughs ETF (NYSEArca: SBIO) focuses on small- and mid-cap companies that have one or more drugs in either Phase II or Phase III U.S. FDA clinical trials. The BioShares Biotechnology Clinical Trials Fund (NasdaqGM: BBC) tracks potential up-and-coming biotechnology companies that are in the clinical trials stage. [Healthcare ETFs: Specialized Drugs in Greater Demand]