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 Track
IHF 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.
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares US Healthcare Providers ETF where we have detected an approximate $29.2 million dollar outflow -- that's a 4.9% decrease week over week (from 5,100,000 to 4,850,000). Among the largest underlying components of IHF, in trading today Anthem Inc is up about 1.4%, Aetna Inc.