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Healthcare Exposure Lifts Some International ETFs

The Health Care Select Sector SPDR (XLV) was the best of the nine sector SPDR exchange traded funds in the first quarter, rising 6.3% while easily topping the 4.8% returned by the second best SPDR, the Consumer Discretionary Select Sector SPDR (XLY) .

Ebullience toward the healthcare sector has not been confined to U.S. borders as highlighted by the 8.3% first-quarter surge by the iShares Global Healthcare ETF (IXJ) . Some single-country ETFs were also boosted by heavy healthcare exposure in the first quarter and those performances included some impressive March showings.

Last month, just nine of 48 global equity markets tracked by S&P Dow Jones Indices rose. Just six of 25 developed markets tracked by the index provider increased in March, but the U.S.-listed ETFs linked to March’s top two developed markets are healthcare-heavy funds. [Healthy Global Healthcare ETFs]

Israeli stocks surged nearly 6.4% last month, accounting for essentially all of the year-to-date gains in that market. On average, the Market Vectors Israel ETF (ISRA) and the iShares MSCI Israel Capped ETF (EIS) are up 7.8% this year.

The two Israel ETFs have been bolstered by large weights to Teva Pharmaceuticals (TEVA), the largest publicly traded Israeli company, a company that is believed to be prowling for acquisitions in the pharma space.

“Teva has over $10 billion in debt capacity to spend on acquisitions and could go after Mylan (MYL), which agreed to buy Abbott Laboratories’ (ABT) generic drug unit last year, or St. Louis, Missouri-based Mallinckrodt (MNK),” reports Gabrielle Coppola for Bloomberg.

The $101.4 million EIS has a 25.1% weight to Teva, which accounts for all of the ETF’s healthcare exposure. ISRA’s Teva weight is lighter at nearly 13%, but that ETF has the larger healthcare allocation at 31.2%. ISRA also features an almost 12% weight to Perrigo (PRGO), the U.S.-listed shares of which are up nearly 5% in the past month. [Prowling Teva Could Lift Some Pharma ETFs]

Another developed market rising with the healthcare tide is Denmark. Danish stocks jumped 3.3% last month, bringing the year-to-date gain to 12.7%, according to S&P data. The iShares MSCI Denmark Capped ETF (EDEN) has surged 13.3% this year.

EDEN, which is home to $55.2 million in assets, allocates 37.2% of its weight to the healthcare sector. That is 1,250 basis points larger than EDEN’s second-largest weight, industrials. Novo Nordisk (NVO), a stock that has climbed 29.1% this year, is EDEN’s largest holding at almost 24.7% of the ETF’s weight.

Market Vectors Israel ETF