Healthcare ETFs have ridden the rollercoaster of US Senate legislation, ticking red and green depending upon the conditions on the Senate floor. Since Obama’s election into the Oval Office, the most active healthcare ETFs have better tracked legislation than their own industries, as line-by-line changes in legislation prompted volatile swings in the industry.

The trend, as outlined by The Street, shows that healthcare ETFs’ price movements have been governed by the status of the reforms. ETFs were first battered following the assumed election of Barack Obama, with iShares Dow Jones US Medical Dev. (IHI: Quote, Profile, Advanced Chart, News) dipping 36.79% in 2008. As healthcare reform fell out of favor in 2009, the ETF recovered, gaining nearly 36% in 2009.

Investors must weigh the pros and the cons of the healthcare industry, which should see an increase of nearly 30 million customers thanks in part to new legislation. However, the portfolio picture is not completely positive for reform, as new taxes on insurers, pharmaceutical companies and other medical product producers are certain to affect profit margins. The chart below shows IHI over the past couple of years.