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TheStreet.com Ratings: Funds With Health Care Exposure

With a new Democratic majority in Congress, speculation about the investment implications of the party's agenda is rampant.

The early commentaries seem to agree that the Democratic leadership will be setting its sights on health care -- and the pharmaceutical industry in particular.

So TheStreet.com Ratings looked at closed-end and exchange-traded funds with heavy exposure to the group.

The table below lists the top 10 ranked by exposure to the health care sector, based on portfolio holdings data as of Oct. 31. Each closed-end fund or ETF has at least 25% of its assets in health care.

The Dems' early agenda is likely to include scrutiny of big pharma's pricing of drugs that are still under patent.

That would not be good for the SPDR Pharmaceuticals (XPH) exchange-traded fund, which tops the list of closed-end funds in terms of health care exposure.

The top three holdings of both the health care and pharmaceuticals Spyders are Johnson & Johnson (JNJ), Pfizer (PFE) and Merck (MRK).

The biotech Spyders' top holdings are Genentech (DNA), Amgen (AMGN) and Gilead Sciences (GILD).

Still up in the air, however, is whether a liberal agenda will help or hurt the hospital sector.

So the jury is still out on the Morgan Stanley Municipal Opportunities Trust closed-end funds, which invest heavily in tax-exempt bonds and notes issued by hospitals and health facilities. New legislation could either help or hurt the credit ratings of these entities.


10 Closed-End Funds, ETFs With Over 25% of Holdings in Health Care
Name Ticker Health Care Exposure
SPDR Pharmaceuticals XPH 99.99%
SPDR Biotech XBI 99.95
SPDR Health Care XLV 99.91
iShares S&P Global Healthcare IXJ 99.72
Morgan Stanley Muni Inc Op III OIC 56.00
Morgan Stanley Muni Inc Op II OIB 53.00
Morgan Stanley Muni Inc Op OIA 42.00
PowerShares FTSE RAFI Health Care PRFH 36.79
Defined Strategy Fund DSF 28.04
Pioneer Tax Advantage Balanced Tr PBF 25.80
*Based on latest available data as of Oct. 31, 2006

Prior to joining TheStreet.com Ratings, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.

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