NEW YORK ( TheStreet) -- With a massive government take-over of the healthcare industry looking less likely, shares of the iShares Dow Jones U.S. Healthcare Providers Index ETF (IHF) and the PowerShares Dynamic Healthcare Services ETF (PTJ) have jumped.
It may not be too late to participate in the run-up. As the Senate continues to strip out provisions in the health care bill, IHF components like Wellpoint (WLP), UnitedHealth Group (UNH) and Aetna (AET) could continue to move to the upside.
Rather than buying into the health care sector as a whole, purchasing shares of IHF or PTJ allows investors to target the subsector of the health care industry most threatened by proposed reform: providers.
Here's a breakdown of these two targeted ETFs, and a recommendation for prospective investors.
What They TrackIHF tracks the iShares Dow Jones U.S. Healthcare Providers Index Fund, a modified cap-weighted index that tracks 47 firms in the healthcare industry. The top component, UnitedHealth Group, comprises 11.33% of this ETF. More than 80% of this fund is allocated to large and medium cap companies. PTJ tracks the Dynamic Healthcare Services Intellidex Index, which uses factors like fundamental growth, stock valuation, investments and risk factors to rank health care companies. While PTJ has just 30 underlying components, the largest holding in the portfolio, WLP, makes up just 5.14% of the ETF. PTJ's portfolio also encompasses a larger scope of health care firms: nearly 50% of the companies in PTJ's portfolio can be classified as small cap. Despite differences in composition, PTJ and IHF share five out of their 10 top components. Both funds count UNH, WLP, Quest Diagnostics (DGX), Laboratory Corp. of America (LH) and Humana (HUM) among their top holdings.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV