This Day On The Street
Continue to site
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

2 Health Care ETFs for Election Shakeup

NEW YORK ( TheStreet) -- After months of intense campaigning, the November elections are upon us. While the final outcome is still yet to be seen, many of the talking heads in the media are already forecasting that increasing voter unrest regarding the state of the economic recovery will lead to a Congressional shakeup.

In the event that they are correct and Congress comes out of the election split along party lines, one of the more exciting areas of the market to watch for investors will be health care.

While I believe that conservative investors should wait until the full effects of the election are felt before making any changes to their portfolio, aggressive investors with a strong stomach for risk may find funds such as the iShares Dow Jones U.S. Pharmaceuticals Index Fund (IHE) and the iShares Dow Jones U.S. Medical Devices Index Fund (IHI) enticing options in the midst of these politically heated times.

President Obama's sweeping health-care reform bill has been met with rabid criticism from opponents through every step of the political process. Now many Washington hopefuls are running on the promise that they will take aim at the bill in the event that they are elected to office.

A Republican-led House of Representatives may be able to generate the political pull needed to chip away at some of this legislation. Reducing or removing some of the Washington hurdles standing in front of the health care industry will aid companies in the the pharmaceutical and medical devices field, thereby allowing them to head higher.

Interestingly, even in light of the health care reform's passage, the pharmaceutical industry has performed well.

IHE has managed to handedly outperform other health care-related ETFs by a comfortable margin. However, in the event that Obama's bill gets muddled, big name drug companies such as Merck (MRK), Abbott Labs (ABT), and Pfizer (PFE) will be forced to face less Washington red tape, thereby allowing them to more freely develop new drugs. These three companies represent some of the largest slices of IHE's portfolio, making up close to a quarter of the fund's total index.

While IHE has managed to outperform ETFs designed to track the broader healthcare industry, IHI, which is designed to track a basket of companies related to the medical devices industry has more closely followed the pack throughout 2010.
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.71 0.01%
FB $102.14 0.23%
GOOG $685.00 0.28%
TSLA $149.13 -0.89%
YHOO $26.88 0.45%


Chart of I:DJI
DOW 15,911.24 +251.06 1.60%
S&P 500 1,852.75 +23.67 1.29%
NASDAQ 4,306.1330 +39.2960 0.92%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs