ETF Trends
ETF Trends

Health care is still the top-performing sector in the S&P 500 this year. In fact, it is the only one still in the green year-to-date and industry groups such as medical devices are a big reason why.

Or were a big reason why. The iShares U.S. Medical Devices ETF (NYSEArca: IHI), the largest dedicated medical devices exchange traded fund, was a leader earlier this year as the health care sector surged, but with the broader market recently weakening, IHI has stumbled. The ETF has fallen 9.3% over the past week and is sporting a year-to-date gain of just 1.4%.

Market analysts argue that medical devices and equipment manufacturers are a good healthcare bet and remain well positioned for global growth, reports Constance Gustke for CNBC.

Specifically, 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.

Emerging countries have a large, aging demographic and workers are seeing incomes rise, which could equate to a 15% revenue growth for medical technology companies from those countries, Gregory Chodaczek, a senior research analyst at Sterne Agee, said.

For instance, McKinsey & Company calculated that China’s healthcare spending could triple between 2011 and 2020. [Growth for Medical Devices ETFs]

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