We've all been waiting on pins and needles to see what kind of health care reform comes out of Washington. Aside from the fact that we're all patients of one kind or another, health care is a huge part of the economy.
As you might expect with big changes afoot, health care stocks have been bouncing up and down this year. Such volatility can be frightening — but it also brings opportunity for investors who know how to take advantage.
The wave of new exchange-traded funds (ETFs) launched in the last few years gives you plenty of ways to bet on health care trends. In fact, there are more than two dozen health care ETFs to choose from.
Like technology and financials, health care can be broken up into several sub-sectors. So today I'll describe these and list a few ETFs for you to consider …
General Practice:
Diversified Health Care ETFs
If you're looking for an ETF to get you into health care quickly and easily, maybe as part of a long-term asset allocation strategy, you can pick from several broad sector funds.
- SPDR Select Health Care Sector (XLV)
- Vanguard Health Care ETF (VHT)
- iShares Dow Jones U.S. Health Care (IYH)
- PowerShares Dynamic Health Care (PTH)
All of these are great funds, well diversified and liquid. I mentioned XLV in last week's Money and Markets column because it contains the health care components of the S&P 500 index.
One drawback to these funds is that they're focused strictly on U.S. stocks while health care is a worldwide industry. In fact, several of the biggest pharmaceutical firms are headquartered in Europe.
