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Investors Flock To Healthcare ETFs On Historic Reform

 March 22, 2010 07:08 PM

"Wall street was glued to the weekend vote on health-care reform and scrambled to figure out which areas, if any, might benefit from its passage. Technically, however, the fortunes of the sector relative to the broad market changed for the better a month ago. In other words, nothing historic changed in these stocks, to borrow from the description of the bill itself. The sector is still in a bull market," Michael Kahn Reports from Barrons.

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Kahn goes on to say, "The Select Sector SPDR Health Care (XLV) ETF, while not at new highs for the rally from the 2009 low, is one of the few sector proxies that did not break its rising trend (see Chart 1). Most others moved below their rising trendlines during the January correction so health care is in good shape technically."

"I have to step back for a moment here to acknowledge that the health-care sector has underperformed the broad market over the past year. However, when analyzed on its own merits, its chart shows a clean rising trend with technical indicators to support its rally. The health-care ETF may have made less money for investors than the Standard & Poor's 500 did but it is actually in a stronger position now with a more sustainable rate of advance," Kahn Reports.

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According to Philip Roth, Chief Technical Market Analyst at Miller Tabak, most elements in the group have been doing fairly well in recent months after having lagged in the second and third quarters of 2009. "Sort of a the worst is not going to happen," he said, regarding the health-care legislation. When asked if he saw anything different technically, now that the vote is over, he answered, "The the sector now looks pretty much like the broader market measures, namely up, but in the mature stages of an advance. I have been recommending some health-care stocks all along; no more, no less right now."

See more to the story: HERE

We have included some details on the Select Sector SPDR Health Care (XLV) ETF including all of the components within the ETF below:

The investment (XLV) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Health Care Select Sector Index. This fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. It has also adopted a policy that requires it to provide shareholders with at least 60 days notice prior to any significant material change in a its policy or its underlying index. It is nondiversified.

Components and weightings as of 3/19/10.

 NameSymbolIndex Weight
2Pfizer Inc.(PFE)10.59%
3Merck & Co. Inc.(MRK)9.20%
5Amgen Inc.(AMGN)4.57%
6Medtronic Inc.(MDT)3.86%
7Bristol-Myers Squibb Co.(BMY)3.48%
8Gilead Sciences Inc.(GILD)3.36%
9UnitedHealth Group Inc.(UNH)3.11%
10Eli Lilly & Co.(LLY)2.85%
11Baxter International Inc.(BAX)2.81%
12Medco Health Solutions Inc.(MHS)2.45%
13WellPoint Inc.(WLP)2.30%
14Celgene Corp.(CELG)2.29%
15Express Scripts Inc.(ESRX)2.27%
16Thermo Fisher Scientific Inc.(TMO)1.58%
17Allergan Inc.(AGN)1.57%
18Becton Dickinson & Co.(BDX)1.49%
19McKesson Corp.(MCK)1.38%
20Biogen Idec Inc.(BIIB)1.28%
21Stryker Corp.(SYK)1.26%
22Genzyme Corp.(GENZ)1.26%
23Aetna Inc.(AET)1.18%
24Intuitive Surgical Inc.(ISRG)1.05%
25St. Jude Medical Inc.(STJ)1.02%
26Cardinal Health Inc.(CAH)1.02%
27Zimmer Holdings Inc.(ZMH)0.96%
28Boston Scientific Corp.(BSX)0.84%
29CIGNA Corp.(CI)0.82%
30Life Technologies Corp.(LIFE)0.75%
31Forest Laboratories Inc.(FRX)0.74%
32Hospira Inc.(HSP)0.72%
33Humana Inc.(HUM)0.71%
34Quest Diagnostics Inc.(DGX)0.69%
35C.R. Bard Inc.(BCR)0.66%
36AmerisourceBergen Corp.(ABC)0.65%
37Laboratory Corp. of America Holdings(LH)0.61%
38Mylan Inc.(MYL)0.54%
39Millipore Corp.(MIL)0.52%
40Varian Medical Systems Inc.(VAR)0.51%
41DaVita Inc.(DVA)0.51%
42Waters Corp.(WAT)0.47%
43Cephalon Inc.(CEPH)0.42%
44Dentsply International Inc.(XRAY)0.39%
45Watson Pharmaceuticals Inc.(WPI)0.35%
46CareFusion Corp.(CFN)0.35%
47Coventry Health Care Inc.(CVH)0.30%
48King Pharmaceuticals Inc.(KG)0.25%
49Patterson Cos. Inc.(PDCO)0.22%
50PerkinElmer Inc.(PKI)0.22%
51Tenet Healthcare Corp.(THC)0.20%

Chart for Health Care Select Sector SPDR (XLV)



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