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Is SPDR S&P Health Care Equipment ETF (XHE) a Strong ETF Right Now?
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Launched on 01/26/2011, the SPDR S&P Health Care Equipment ETF (XHE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by State Street Global Advisors, XHE has amassed assets over $403.20 million, making it one of the average sized ETFs in the Health Care ETFs. Before fees and expenses, XHE seeks to match the performance of the S&P Health Care Equipment Select Industry Index.
The S&P Health Care Equipment Select Industry Index represents the health care equipment segment of the S&P Total Market Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
XHE's 12-month trailing dividend yield is 0.03%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XHE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
When you look at individual holdings, Butterfly Network Inc. Class A (BFLY - Free Report) accounts for about 2% of the fund's total assets, followed by Shockwave Medical Inc. (SWAV - Free Report) and Senseonics Holdings Inc. (SENS - Free Report) .
Its top 10 holdings account for approximately 18.06% of XHE's total assets under management.
Performance and Risk
The ETF has lost about -24.68% so far this year and is down about -26.48% in the last one year (as of 10/05/2022). In the past 52-week period, it has traded between $79.20 and $131.87.
The ETF has a beta of 0.97 and standard deviation of 28.37% for the trailing three-year period, making it a medium risk choice in the space. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Health Care Equipment ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
First Trust Indxx Medical Devices ETF (MDEV - Free Report) tracks INDXX GLOBAL MEDICAL EQUIPMENT INDEX and the iShares U.S. Medical Devices ETF (IHI - Free Report) tracks Dow Jones U.S. Select Medical Equipment Index. First Trust Indxx Medical Devices ETF has $1.67 million in assets, iShares U.S. Medical Devices ETF has $6.16 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.39%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is SPDR S&P Health Care Equipment ETF (XHE) a Strong ETF Right Now?
Launched on 01/26/2011, the SPDR S&P Health Care Equipment ETF (XHE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by State Street Global Advisors, XHE has amassed assets over $403.20 million, making it one of the average sized ETFs in the Health Care ETFs. Before fees and expenses, XHE seeks to match the performance of the S&P Health Care Equipment Select Industry Index.
The S&P Health Care Equipment Select Industry Index represents the health care equipment segment of the S&P Total Market Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
XHE's 12-month trailing dividend yield is 0.03%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XHE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
When you look at individual holdings, Butterfly Network Inc. Class A (BFLY - Free Report) accounts for about 2% of the fund's total assets, followed by Shockwave Medical Inc. (SWAV - Free Report) and Senseonics Holdings Inc. (SENS - Free Report) .
Its top 10 holdings account for approximately 18.06% of XHE's total assets under management.
Performance and Risk
The ETF has lost about -24.68% so far this year and is down about -26.48% in the last one year (as of 10/05/2022). In the past 52-week period, it has traded between $79.20 and $131.87.
The ETF has a beta of 0.97 and standard deviation of 28.37% for the trailing three-year period, making it a medium risk choice in the space. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Health Care Equipment ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
First Trust Indxx Medical Devices ETF (MDEV - Free Report) tracks INDXX GLOBAL MEDICAL EQUIPMENT INDEX and the iShares U.S. Medical Devices ETF (IHI - Free Report) tracks Dow Jones U.S. Select Medical Equipment Index. First Trust Indxx Medical Devices ETF has $1.67 million in assets, iShares U.S. Medical Devices ETF has $6.16 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.39%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.