Inflation hasn’t been the only thing going up as of late. Rising healthcare costs have also been hitting consumers, putting the Direxion Daily Healthcare Bull 3X ETF (CURE ) in perspective for traders as a potential play.
The rise of healthcare costs is forcing consumers to re-think their priorities, particularly when rising inflation remains a key factor. A majority of consumers are looking to curb costs by prolonginging treatment or skipping it entirely.
“Higher health care prices drove 38% of American adults — an estimated 98 million people — to either delay or skip treatment; cut back on driving, utilities, and food; or borrow money to pay medical bills in the last six months,” a Benefits Pro article said.
“That’s according to a new survey conducted by West Health and Gallup in June, the same month inflation in the United States reached 9.1%, a new 40-year high,” the article said further.
Meanwhile, the healthcare industry continues to shine even after the height of the pandemic and despite the weakness in the stock market for most of the year. The S&P 500 index is down about 10%, while the S&P 500 Healthcare Index is down just about half of that.
3 Times the Bullishness
Healthcare has typically been a tried-and-true sector when it comes to a market downturn. With all the talk surrounding a potential recession, healthcare exposure could serve investors well in times of a downturn.
For traders, it means a potential play on healthcare should a recession hit, as well as potential revenue generation as medical costs rise. As such, CURE could be in a prime position to benefit if these factors come into play.
CURE seeks daily investment results equal to 300% of the daily performance of the Health Care Select Sector Index. The fund achieves this exposure by investing at least 80% of its net assets in financial instruments, such as swap agreements, securities of the index, and ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or to ETFs that track the index.
The index includes domestic companies from the healthcare sector, which includes pharmaceuticals, healthcare equipment, and supplies; healthcare providers and services; biotechnology; life sciences tools and services; and more. These sub-industries have all been affected by the pandemic in some form or fashion, giving traders dynamic opportunities to play the market.
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