With Midterms Looming, Consider Healthcare ETFs

The 2018 midterm elections are just days away and the outcomes of those contests could affect an array of sectors and industries. Currently, most political prognosticators are forecasting the Democrats gaining control of the House while the Republicans are expected to maintain control of the Senate.

Healthcare, one of this year’s stronger sectors, is a group historically impacted by events on Capitol Hill. Industry exchange traded funds, such as the SPDR S&P Health Care Services ETF (NYSEArca: XHS), could be in focus following the midterm elections.

XHS covers companies in the sub-industries involved in Health Care Distributors, Health Care Facilities, Health Care Services, and Managed Health Care, and it follows a more equally weighted indexing methodology.

“If Republicans maintain majority control of the House and increase their Senate majority by at least one seat, they would likely have the votes to pass more substantial reform or repeal the Affordable Care Act (ACA) in its entirety,” said State Street Global Advisors (SSgA) in a note out Wednesday.

To that point, XHS could rally if the Democrats gain control of both the House and Senate.

Other Healthcare Industry Ideas

“Drug pricing reform continues to be a hot topic for the president. While unique in its potential to drum up bi-partisan support, to date Congress has focused only on pharmacy benefit managers (PBMs). A bill to ban pharmacy gag clauses currently sits on the president’s desk for signature,” according to SSgA.