Bullish Outlook for Preventive Medicine Companies Reflected in New ETF

In addition to bullish outlooks for generic drugs and Health IT, President-Elect Obama's healthcare plan is set to focus on public health initiatives and mandated coverage of preventive services such as cancer screenings. The accompanying table (click to enlarge) presents statistics and the top five rated companies in the ETFI Preventive Medicine Index, including vaccine makers such as Emergent BioSolutions (EBS), diabetes care companies such as Novo Nordisk (NVO), diagnostic companies such as Sequenom (SQNM) and Myriad Genetics (MYGN), and lab services companies such as Genoptix (GXDX), LabCorp (LH), and Quest Diagnostics (DGX).

The index has outpaced the overall market, healthcare sector SPYDR (XLV), HealthShares Diagnostics (HHD), and iShares Nasdaq Biotech (IBB) over the past year, posting an 8% gain for the top 25 rated companies and a 12.4% loss for all 54 companies. Although the index includes diagnostic companies, only eight of the 25 top rated companies are duplicates with the existing HealthShares Diagnostics ETF.

Diabetes care companies are included in the index since the complications of uncontrolled diabetes result in not only terrible health consequences, but are very costly to manage. Also, the incidence of diabetes is rising at an alarming rate due to the prevalence of obesity and sedentary lifestyles in the U.S. and other developed markets.

Comments

[Dr. Charles...:]

Reports about the epidemic of diabetes have probably increased interest in the diabetes care market. Lowering blood sugar levels can help lower the costs associated with diabetes and well as limit the damage to a patient's health. Combining dental and physical care for people who have diabetes can help lower the overall cost of treatment. I've written about this extensively on my blog at dentistryfordiabetics.....

- Charles Martin, DDS
Founder, Dentistry for Diabetics

2008 Nov 06 10:20 AM

[Steve in TN:]

Maybe I'm missing something, but is this a tradeable ETF?
If so, what is the symbol for the preventative medicine ETF?

2008 Nov 06 10:20 AM

[Yossel:]

Re SteveTN: It appears the article was written to alert us to a new index, while a headline writer wrote an erroneus slug about a new etf.

2008 Nov 06 10:42 AM

[Mike Havrilla:]

Yes, the article is to highlight a new index featuring diagnostic + diabetes care companies as the major components - this is the title I used on my blog:

Obama-Care Focused on Preventive Medicine

www.etfinnovators.com/...


On Nov 06 10:42 AM Yossel wrote:

> Re SteveTN: It appears the article was written to alert us to a new
> index, while a headline writer wrote an erroneus slug about a new
> etf.

2008 Nov 06 11:05 AM

[bsharvy:]

Not so sure about lab companies. They do a lot of employment screening ("pee tests"), and employment is very weak.

2008 Nov 06 06:33 PM