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Despite Ongoing Obamacare Controversy This ETF Soars


Type “Obamacare” into Google News and 997,000 results are returned in just over two tenths of a second.

The headlines run the gamut of supportive to critical to blind naivety to borderline hostile. At the end of the day, it is not really surprising that some media organizations with reputations for being overtly liberal provide favorable coverage of Obamacare while more conservative publications deride the president’s health care law.

What is not up for debate is that 7 out of every 10 Americans surveyed by Bankrate.com believe Obamacare is either harming the U.S. or doing nothing to help the country.

It also cannot be debated that despite all the ongoing controversy that has surrounded Obamacare for several years now, the iShares U.S. Healthcare Providers ETF (IHF) remains one of the more impressive health care ETFs. [Obamacare ETF Tries to Skirt Controversy]

Although biotechnology stocks and exchange traded funds are rebounding a bit, this is not January or February when the daily lists of ETFs hitting all-time highs were populated by funds such as the iShares Nasdaq Biotechnology ETF (IBB) and the Health Care Select Sector SPDR (XLV) .

However, IHF was among the ETFs making new highs Wednesday. IHF did struggle in the first three weeks of April, falling 6.2% from its early April peak to its April 17 trough.

Over the past month, IHF is up nearly 6%, outpacing broader health care and pharmaceuticals ETFs along the way.

More than half of the 30 members of the Dow Jones Industrial Average are higher over the past month, but United Health is one of the leaders with a gain of 4%. The stock is IHF’s largest holding at a weight of 13.7%. Shares of WellPoint (WLP) are higher by nearly 14% since late April. The stock is IHF’s third-largest holding with an allocation of 7.5%.

Aetna (AET), IHF’s fourth-largest constituent, is up 9% in the past month. Aetna had 230,000 Obamacare members at the end of the first quarter and that number could double by the end of this year, Investor’s Business Daily reported, citing a JPMorgan analyst.

With health care mergers and acquisitions activity picking up, IHF could find itself in the spotlight even more. Earlier this year, Morgan Stanley identified Express Scripts (ESRX), WellPoint, Cigna (CI) and Aetna as possible takeover targets. Those stock combine for over 30% of IHF’s weight. [A Health Care ETF Full of Takeover Targets]

iShares U.S. Healthcare Providers ETF