The healthcare sector and the corresponding exchange-traded funds do not have the reputation for being comparably as sensitive to changes in interest rates as say utilities or real estate stocks. Nor are healthcare ETFs as positively levered to rising rates as financial services funds are.
During the Federal Reserve's 2004 through 2006 tightening cycle, the Health Care SPDR (ETF) (NYSE: XLV), the largest healthcare ETF by assets, offered slight out-performance over the S&P 500. That is to say, sector investors could have done better against the S&P 500 than they did with XLV, but they also could have done much worse.
Biotech, Healthcare And Interest Rates
With the emergence of the biotech industry as a mainstream investment thesis and the subsequent inflows totalling in the billions to biotech ETFs in recent years, healthcare investors are undoubtedly pondering how biotech stocks and funds ...
/www.benzinga.com/general/biotech/15/11/5997997/healthcare-etfs-check-up-ahead-of-higher-interest-rates alt=Healthcare ETFs' Check Up Ahead of Higher Interest Rates>Full story available on Benzinga.com
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