David Einhorn, manager of hedge fund Greenlight Capital, reported several new positions in health care during the second quarter according to his 13F filling. Einhorn, who we respect for several of his great calls, including Apple (click ticker for report: AAPL) and Seagate Technologies (STX) on the long side and Green Mountain Coffee Roasters (click ticker for report: GMCR) and First Solar (FSLR) on the short side, likely began accumulating a position in response to clarity on the Affordable Healthcare Act, in our view.

The famed hedge fund manager took positions in WellPoint (WLP), Humana (HUM), Coventry (CVH), UnitedHealth Group (UNH), Aetna (AET) and Cigna (CI)—essentially investing in the entire cohort. Most of these companies trade at single digits earnings multiples and generate solid free cash flow.

We prefer to obtain exposure to the healthcare sector via the Healthcare Select Sector SPDR (click ticker for report: XLV). This ETF has a good expense ratio (just 0.18%), excellent Valuentum Buying Index rating, as well as exposure to many of the undervalued firms that have found their way into hedge fund managers' portfolios recently. Diversified exposure, which comes with owning this ETF, also allows us to capitalize on the secular growth of health-care spending, while limiting firm-specific risk due to policy overhaul.