NEW YORK (ETF Expert) -- In the Feb. 10 edition of USA Today, journalist Janice Lloyd presented a number of sobering stats for baby boomers. For example, the demand for knee replacements in the 45 to 64 age bracket has tripled over the past 10 years. What's more, nearly one fifth of the 4.5 million Americans who have already experienced total knee replacements may eventually require revisions due to loosening, fractures and/or general wear and tear.
Why do these numbers matter? For one thing, prosthetic joints from knees to hips should be extremely profitable for manufacturers for decades to come. For another, the
iShares Medical Devices Fund
may be a better way to diversify across implant manufacturers -- from
" has been a better performer over the course of the three-year bull market. This is due primarily to an investor base that shunned the risk of rapid-growth industries. In the last three months, however, the technologically oriented, economically sensitive medical device segment has picked up a head of steam.
There are a variety of things to like about the iShares Medical Devices Fund. Beta risk is roughly 10% less than that of the
. The cost of ownership is a relatively reasonable 0.47%. And many of the orthopedic implant maker's in the
Dow Jones U.S. Select Medical Equipment Index
have exceptionally profitable sources of
Chart-lovers and technical analysts should be relatively impressed as well. There's been a fairly well-defined support level for the downside at a price point of 54. The current price is above the 200-day moving average. Yet, based upon 52-week highs, IHI still might have plenty of room to run.
Personally, I might wait for a bit more of a pullback before establishing a position. That said, if we see continued evidence of a so-so backdrop for stock assets -- if there's additional signs that Europe can muddle through and China can expand without sparking inflation . . . the iShares Medical Devices Fund may certainly make it onto my wish list.
Disclosure Statement: ETF Expert is a Web site that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.