Ron DeLegge: Despite the recent outperformance of Healthcare Stocks there is still plenty to like about this particular industry sector. I am Ron DeLegge with ETF Guide.
Never mind the tailwinds created by the Affordable Care Act demographics is playing a major role in pushing healthcare stocks in the healthcare sector higher. The Health Care Sector SPDR ETF that's Ticker Symbol XLV is an example of one way to get exposure to this fast growing sector.
XLV contains publicly traded companies that manufacture healthcare equipment, pharmaceuticals, and biotech along with healthcare providers.
A research paper titled Attention, Demographics, and the Stock Market published by researchers from Harvard and the University of California at Berkley, found a direct link between demographics-driven demand for certain products and services and the future profitability of these very companies producing these products and services.
Come and thing of it, doesn't that accurately describe the current state of the healthcare sector? Yes, aging baby-boomers are using these medical facilities, prescription, pharmaceuticals and other healthcare services.
Beyond demographics other factors according to researchers that impact or affect the long-term profitability of companies include new plant openings and research and development. Both of these things continue to be Hallmarks of the fast-growing healthcare sector.