This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

ETFs a Safer Way to Bet on Health Care

The uncertainty over the future of health care has exacted a toll on the industry. ETFs like iShares Dow Jones US Healthcare Provider (IHF), Pharmaceutical HOLDRs (PPH) and iShares Biotechnology (IBB) all will be affected differently by changes in legislation.

One fact remains indisputable, however: America is getting older. As baby boomers reach old age, health care costs are expected to skyrocket. Whether or not new legislation transforms our existing system, costs likely will rise over the long term.

Wealth in Healthcare?

Picking individual drug companies or health care providers can be a tricky business, as outside factors like drug trials, lawsuits and legislation can weigh on results. ETFs are an effective way to mitigate the risk of investing in a single health care company by exposing investors to a basket of securities, rather than a hit-or-miss pick.

The three main categories of health care ETFs are pharmaceutical, health care provider and biotechnology. Other, more specialized ETFs like iShares Dow Jones U.S. Medical Devices Index Fund (IHI) and international funds like WisdomTree International Health Care Sector Fund (DBR) offer different perspectives.

Health care providers could have the most to lose in the battle for America's health care. iShares Dow Jones US Healthcare Provider (IHF) plummeted more than 40% in 2008 as investors tried to estimate the extent of health care reform. Top IHF components like UnitedHealth Group (UNH - Get Report) and Medco Health Solutions (MHS) could be dramatically affected by a large shift toward a government "option" program.

Health care price regulation could promote the use of generics at the expense of the pharmaceutical industry. Generic drugs have become more prevalent in recent years and have eaten into the profits of some of the large drugmakers. Pharmaceutical HOLDRs includes drugmakers like Abbott Labs (ABT) and Bristol-Myers Squibb (BMY).
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
IHF $139.88 -0.07%
IHE $180.67 -0.52%
IHI $125.64 -0.58%
IBB $382.13 -0.10%
PPH $74.26 0.09%

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs