Health Care ETFs With Obamacare Exposure

June 27, 2012

 

The Supreme Court’s decision tomorrow on the constitutionality of President Obama’s health care plan is sure to affect the world of ETFs, no matter how the High Court ends up ruling on the landmark legislation, so ETF investors should consider different outcomes, according to an article on The Street.

Three outcomes loom: the Affordable Care Act is considered completely constitutional; it’s ruled partly unconstitutional; or it is completely upheld, the article said.

If the law is left untouched, then investors ought to take positions in any of a number of viable ETFs targeting everything from drug companies to medical equipment and service providers that would benefit from reduced uncertainty and the addition of millions of new paying customers, the Street report said.

Those ETFs include:

  • iShares Dow Jones U.S. Pharmaceutical Index Fund (NYSEArca: IHE)
  • PowerShares Dynamic Pharmaceuticals Portfolio (NYSEArca: PJP)
  • SPDR S&P Pharmaceuticals ETF (NYSEArca: XPH)
  • First Trust Health Care AlphaDex Fund (NYSEArca: FXH)
  • Vanguard Healthcare Index ETF (NYSEArca: VHT)
  • Guggenheim S&P 500 Equal Weight Health Care ETF (NYSEArca: RYH)

 

Conversely, should the Supreme Court strike down the law as unconstitutional, these funds would likely plunge in value, creating a huge buying opportunity for a sector that is likely to be vibrant over the longer term, the article said.

For the full story, head over to The Street.

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