Why Healthcare Sector is a Great November Play

The SPDR Pharmaceuticals ETF (NYSEArca: XPH) is another ETF that often delivers for investors in November. XPH, an equal-weight spin on the pharmaceuticals space, averages a November gain of 3.45% while XBI posts an average November return of 3.84%, according to Schaeffer’s. XBI finishes positive 70% of the time in November while XPH is positive 60% of the time in the eleventh month of the year.

Related: Healthcare Sector ETFs Pop on Earnings Support

XBI, which is an equal-weight biotech ETF, on a historical basis, has delivered tidy fourth-quarter returns. Healthcare stocks are also showing attractive valuations relative to other defensive sectors, which are richly valued. Biotechnology historically trades at multiples that are elevated relative to broader benchmarks, but after last year’s of struggles for biotechnology names, some analysts see value with some big-name biotech stocks.

ETF traders who are betting big on the biotechnology sector rebound have also utilized leveraged long options including the Direxion Daily S&P Biotech Bull Shares (NYSEArca: LABU), which takes the 3x or 300% daily performance of the S&P Biotechnology Select Industry Index.

For more information on the healthcare sector, visit our healthcare category.