An ETF to Access a Growing Health Care Segment | ETF Trends

Health care investors can now target a growing segment of the pharmaceutical industry through a relatively new generics drug exchange traded fund.

The Market Vectors Generic Drugs ETF (NasdaqGM: GNRX) tries to reflect the performance of the Indxx Global Generics & New Pharma Index, which tracks a number of global drug makers that generate significant revenue stream from generic drug sale. Investors may recognize some global heavy weights among the ETF’s top holdings, including Teva Pharmaceutical Industries (NYSE: TEVA), Actavis (NYSE: AGN), Sun Pharmaceutical Industries (SUNP), Baxalta (NYSE: BXLT) and Mylan Inc. (NasdaqGS: MYL).

“Over the last few years, generic drugs – low-cost copies of branded drugs – have been gaining in volume and market share,” according to Indxx research.

For instance, healthcare giant Johnson & Johnson (NYSE: JNJ) recently revealed drug sales were up 4.2% worldwide last year, Fortune reported. The healthcare company has been relying on drug sales to support growth as its medical devices unit experiences a decline in revenue. Drug sales now account for about 45% of the company’s total revenue and have increased almost 9.6% annually since 2010.

“Due to the growth of the space, generic drug manufacturers are a compelling investment theme for investors,” according to Indxx. “There are also a number of other trends in the industry, from aging populations and higher healthcare spending to mergers and acquisitions that could make it even more attractive.”