FHLC holds 344 stocks, a combined 53% of which are pharmaceuticals and biotechnology names. Healthcare equipment makers represent 20.5% of FHLC’s roster.
The pharmaceutical and biotechnology sub-sectors may benefit under a Republican president and Congress as the industries are less at risk of price controls that Democrats vowed to impose.
Market observers are growing more bullish on the sector as a Republican-led Congress and administration could enact reforms to free cash held overseas for tax reason by large U.S. pharmaceutical companies, which could pave the way for increased acquisitions in the sector. The White House is also looking to help the Food and Drug Administration (FDA) expedite new drug approvals, which could serve as a major catalyst for the biotechnology space.
“If the healthcare industry can remain strong and see favorable political policy, strongholds like Johnson & Johnson, AbbVie (NYSE: ABBV), Regeneron (NASDAQ: REGN), Amgen, and more will lift the ETF to new highs as they continue to develop new products and treatments for consumers. This ETF should attract more popularity in the future, which could drive shares higher and increase its market cap,” according to Seeking Alpha.
For more information on the healthcare sector, visit our healthcare category.