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 IHI was not immune to the tumble experienced by the health care sector during the summer.
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]
With the health care sector recently firming and IHI up nearly 6% over the past month, investors might want to give the medical devices a look as potential play heading into the end of the year.