Money is flooding into exchange-traded funds focused on health care at the fastest rate in at least six years, driven by booming biotechnology and pharmaceutical sectors bringing new products to market.

In 2014, 51 percent of money flowing into U.S. sector-focused ETFs, or $4.06 billion through Feb. 28, was for health-care funds, according to data compiled by Bloomberg. Thats more than two-thirds of the total deposits the funds attracted in all of 2013, and a greater share of total ETF contributions than any time since at least 2008.

People thought drug development was dead and all there was was a patent cliff, Doug Foreman, chief investment officer at Kayne Anderson Rudnick Investment Management in Los Angeles whose firm oversees about $9 billion, said referring to the loss of exclusivity for top-selling brand-name medicines. There isnt a day that goes by that some company doesnt report positive results from a trial and the stock is up 100 percent.

Exchange-traded funds are securities that track an index or basket of stocks or bonds in a given market or industry sector. They can be easily traded and come with low costs. Inflows to U.S. ETFs more than tripled to $183 billion last year from 2004, according to data compiled by Bloomberg.

This year also is the health-care sector's highest share of exchange-traded funds ... Read More

This year also is the health-care sector's highest share of exchange-traded funds inflows since President Barack Obama took office and debate began in 2009 over the Patient Protection and Affordable Care Act, Obama's signature health-care overhaul. Close

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This year also is the health-care sector's highest share of exchange-traded funds inflows since President Barack Obama took office and debate began in 2009 over the Patient Protection and Affordable Care Act, Obama's signature health-care overhaul.

This year also is the health-care sectors highest share of ETF inflows since President Barack Obama took office and debate began in 2009 over the Patient Protection and Affordable Care Act, Obamas signature health-care overhaul. After the law was signed in 2010, health-care ETFs saw $944.9 million leave, and health was the worst performing of 12 ETF sectors.

Concern that the law known as Obamacare would damage the sector -- which helped drive down health stocks in 2010 -- is largely over, said Les Funtleyder, a longtime heath-sector investor and analyst who is a consulting partner at Bluecloud Healthcare. The firm doesnt have an health-care ETF investments.

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Money Pours Into Health-Care ETFs Spurred by New Drugs