Industry 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. Looking ahead, in the years through 2024, spending growth is projected to average 5.8% and peak at 6.3% in 2020.
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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.
“FXH allocates a combined 58.3% of its weight to healthcare provider and fast-growing healthcare equipment makers, two of the best-performing industry groups in the broader healthcare sector this year. Obviously, the risk with FXH is that if biotechnology and pharmaceuticals names rally, the ETF can lag its cap-weighted rivals,” notes Investor Place.
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