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Is SPDR S&P Health Care Equipment ETF (XHE) a Strong ETF Right Now?
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A smart beta exchange traded fund, the SPDR S&P Health Care Equipment ETF (XHE - Free Report) debuted on 01/26/2011, and offers broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. XHE has been able to amass assets over $305.19 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.
Operating expenses on an annual basis are 0.35% for XHE, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.03%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector - about 100% of the portfolio.
When you look at individual holdings, Rxsight Inc (RXST - Free Report) accounts for about 2.16% of the fund's total assets, followed by Transmedics Group Inc (TMDX - Free Report) and Procept Biorobotics Corp (PRCT - Free Report) .
XHE's top 10 holdings account for about 19.33% of its total assets under management.
Performance and Risk
The ETF has gained about 1.17% and is down about -7.66% so far this year and in the past one year (as of 03/04/2024), respectively. XHE has traded between $66.75 and $99.27 during this last 52-week period.
The fund has a beta of 0.96 and standard deviation of 26.10% for the trailing three-year period, which makes XHE a medium risk choice in this particular space. With about 73 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 $3.14 million in assets, iShares U.S. Medical Devices ETF has $5.56 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.40%.
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?
A smart beta exchange traded fund, the SPDR S&P Health Care Equipment ETF (XHE - Free Report) debuted on 01/26/2011, and offers broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. XHE has been able to amass assets over $305.19 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.
Operating expenses on an annual basis are 0.35% for XHE, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.03%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector - about 100% of the portfolio.
When you look at individual holdings, Rxsight Inc (RXST - Free Report) accounts for about 2.16% of the fund's total assets, followed by Transmedics Group Inc (TMDX - Free Report) and Procept Biorobotics Corp (PRCT - Free Report) .
XHE's top 10 holdings account for about 19.33% of its total assets under management.
Performance and Risk
The ETF has gained about 1.17% and is down about -7.66% so far this year and in the past one year (as of 03/04/2024), respectively. XHE has traded between $66.75 and $99.27 during this last 52-week period.
The fund has a beta of 0.96 and standard deviation of 26.10% for the trailing three-year period, which makes XHE a medium risk choice in this particular space. With about 73 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 $3.14 million in assets, iShares U.S. Medical Devices ETF has $5.56 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.40%.
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.