In terms of sector ETFs, the iShares Dow Jones U.S. Medical Devices Index Fund does not get a lot of press, but its place on this list is warranted. In all the debate and scrutiny on the Affordable Care Act, also known as Obamacare, an important fact got lost in the shuffle.
That fact is that the most sweeping health care legislation this country has seen in generations contains a punitive tax on medical device makers that has yet to go into effect. To this point, it can be argued that Obamacare has not hurt IHI...yet. However, the pain train may arrive next year because Obamacare was upheld and the tax on medical device makers will go into effect at that time.
A study by the Battelle Technology Partnership Practice found the tax on medical device makers could lead to the loss of tens of thousands of jobs and billions of dollars of lost economic output. Assuming Obamacare remains in place and the tax on medical device makers is not dealt with in a favorable manner, IHI could suffer. In other words, a Romney victory could be a boon for this ETF.
The Market Vectors Oil Services ETF has been a surprisingly strong performer, for the most part, since President Obama moved to the White House. The reasoning behind OIH's shock-value performance is because of the current administration’s ill-fated infatuation with alternative energy. Not only that, but this president has not spent all of his vitriol-laden rhetoric on Wall Street banks; he has saved plenty of it for big oil companies.
To be fair, domestic production of fossil fuels is on the rise in the U.S. because of the shale boom, a trend that does not look like it will abate any time soon. Still, it is tempting to think about how oil services’ stocks could perform under an administration that is, shall we say, more hospitable to upside in these stocks.
OIH is a volatile, fast-moving ETF chock full of many of the best names in the oil services industry. Its performance immediately following the election could be a tell-tale sign regarding how the energy sector at large will perform over the next couple of years.
Other ETFs To Take Note Of
If you’re interested in more ETFs to keep an eye on, you should be looking at the emerging markets sector…and not the usual suspects of Brazil, China, India, and South Korea. To learn about five specific emerging market ETFs that I believe are ready to breakout, check my new special report: “5 ETFs For Emerging Markets.”