Nearly 10 months into the year, many investors by now that healthcare exchange traded funds such as the Vanguard Health Care ETF (NYSEArca: VHT) and the Health Care Select Sector SPDR (NYSEArca: XLV) have been duds relative to recent annual performances.
Political posturing has been weighing on the S&P 500’s third-largest sector weight, sending biotechnology and some specialty pharmaceuticals stocks tumbling.
In August, Democratic presidential nominee, Hillary Clinton, put the spotlight on Mylan (NasdaqGS: MYL) EpiPen prices, triggering a selloff in biotech exchange traded funds and reminding investors of political risks in an election season. Here comments were particularly painful for ETFs such as the iShares Nasdaq Biotechnology ETF (NasdaqGM: IBB) and the SPDR S&P Biotech ETF (NYSEArca: XBI).
This was the third time over the past year that Clinton’s comments upended drug stocks. The presidential runner has repeatedly censured aggressive drug pricing. With most polls giving her a wide margin over Republican nominee Donald Trump, the markets are taking Clinton’s words more seriously.
The technical prognosis is not encouraging for ETFs such as XLV.