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 - Get Report), Pfizer (PFE - Get Report) and Merck (MRK - Get Report). The biotech Spyders' top holdings are Genentech (DNA), Amgen (AMGN - Get Report) and Gilead Sciences (GILD - Get Report). 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 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|