BMO Canadian ETF Dashboard

— as of November 30, 2018 —

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The U.S. Health Care Sector is on a Tear

Russ Visch

The U.S. Health Care Sector is on a Tear

Summary of Trade Ideas

BMO Equal Weight U.S. Health Care Hedged to CAD Index ETF (Ticker: ZUH)

Macro Update 

  • The S&P 500 Health Care sector has been the third strongest sector in the index this year with an 11.7% year-to-date (YTD) return (behind only Consumer Discretionary and Information Technology)
  • Pharmaceutical and biotech stocks are among the biggest outperformers
  • The Health Care sector has been relatively immune to trade war rhetoric, as tariffs have little impact on the sector

Bottom-Up Impact

  • Strong performers in the sector include Align Technology (up 80% YTD) and Illumina, Inc. (up 69% YTD)
  • HCA Healthcare has been one of the strongest performers this quarter, up 28% since the beginning of Q3, supported by several M&A transactions

The Technical Analysis

The S&P 500 Healthcare Index recently broke to a new all-time high above resistance at 1042.

  • Breakout was an extremely bullish development that opened a new upside target of 1172 – more than 10% higher from current levels
  • More importantly however, the multi-year trend of underperformance has recently reversed (i.e., not only is there a decent absolute gain to be made here, but this sector should continue to outpace the gains in the S&P 500 in the weeks and months ahead)

2018-10-ETFCharts-Relative-Performance-EN-848.jpg#asset:1682


Implementation For exposure to the U.S. Health Care sector, consider buying BMO Equal Weight U.S. Health Care Hedged to CAD Index ETF (Ticker: ZUH).

2018-10-ETFCharts-BMO-Equal-Weight-EN-848.jpg#asset:1678


Top Holdings (%)
Align Technology Inc 2.32
Illumina, Inc. 2.31
Centene Corp. 2.31
ABIOMED Inc. 2.22
Eli Lilly & Co. 2.19
HCA Holdings, Inc. 2.09
Boston Scientific Corp. 2.08
Merck & Co. Inc. 2.06
Intuitive Surgical Inc. 2.04
Humana Inc. 2.01
Russ Visch

The U.S. Health Care Sector is on a Tear

Summary of Trade Ideas

BMO Equal Weight U.S. Health Care Hedged to CAD Index ETF (Ticker: ZUH)

Macro Update 

  • The S&P 500 Health Care sector has been the third strongest sector in the index this year with an 11.7% year-to-date (YTD) return (behind only Consumer Discretionary and Information Technology)
  • Pharmaceutical and biotech stocks are among the biggest outperformers
  • The Health Care sector has been relatively immune to trade war rhetoric, as tariffs have little impact on the sector

Bottom-Up Impact

  • Strong performers in the sector include Align Technology (up 80% YTD) and Illumina, Inc. (up 69% YTD)
  • HCA Healthcare has been one of the strongest performers this quarter, up 28% since the beginning of Q3, supported by several M&A transactions

The Technical Analysis

The S&P 500 Healthcare Index recently broke to a new all-time high above resistance at 1042.

  • Breakout was an extremely bullish development that opened a new upside target of 1172 – more than 10% higher from current levels
  • More importantly however, the multi-year trend of underperformance has recently reversed (i.e., not only is there a decent absolute gain to be made here, but this sector should continue to outpace the gains in the S&P 500 in the weeks and months ahead)

2018-10-ETFCharts-Relative-Performance-EN-848.jpg#asset:1682


Implementation For exposure to the U.S. Health Care sector, consider buying BMO Equal Weight U.S. Health Care Hedged to CAD Index ETF (Ticker: ZUH).

2018-10-ETFCharts-BMO-Equal-Weight-EN-848.jpg#asset:1678


Top Holdings (%)
Align Technology Inc 2.32
Illumina, Inc. 2.31
Centene Corp. 2.31
ABIOMED Inc. 2.22
Eli Lilly & Co. 2.19
HCA Holdings, Inc. 2.09
Boston Scientific Corp. 2.08
Merck & Co. Inc. 2.06
Intuitive Surgical Inc. 2.04
Humana Inc. 2.01