Designed to provide broad exposure to the Health Care ETFs category of the U.S. equity market, the SPDR S&P Health Care Equipment ETF (XHE - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Because the fund has amassed over $239.12 M, this makes it the largest ETF in the Health Care ETFs. XHE is managed by State Street Global Advisors. Before fees and expenses, XHE seeks to match the performance of the S&P Health Care Equipment Select Industry Index.
This Index represents the health care equipment and supplies sector of the S&P Total Market Index. The Index is one of nineteen S&P Select Industry Indices, each designed to measure the performance of a narrow sub-industry or group of sub-industries as defined by the GICS.The Health Care Index is a modified equal weight index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With the least expensive product in the space, this ETF has annual operating expenses of 0.35%.
XHE's 12-month trailing dividend yield is 0.02%.
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.
XHE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
Taking into account individual holdings, Dexcom Inc. (DXCM - Free Report) accounts for about 1.82% of the fund's total assets, followed by Glaukos Corp (GKOS - Free Report) and Insulet Corporation (PODD - Free Report) .
The top 10 holdings account for about 17.55% of total assets under management.
Performance and Risk
XHE has gained about 10.84% so far this year, and as of 04/21/2018, it's up approximately 27.13% in the last one year. In the past 52-week period, the fund has traded between $56.42 and $72.27.
The fund has a beta of 0.90 and standard deviation of 16.59% for the trailing three-year period, which makes XHE a medium choice in this particular space. With about 71 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.
IShares U.S. Medical Devices ETF (IHI - Free Report) tracks Dow Jones U.S. Select Medical Equipment Index. The fund has $1.71 B in assets. IHI has an expense ratio of 0.44%.
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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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Designed to provide broad exposure to the Health Care ETFs category of the U.S. equity market, the SPDR S&P Health Care Equipment ETF (XHE - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Because the fund has amassed over $239.12 M, this makes it the largest ETF in the Health Care ETFs. XHE is managed by State Street Global Advisors. Before fees and expenses, XHE seeks to match the performance of the S&P Health Care Equipment Select Industry Index.
This Index represents the health care equipment and supplies sector of the S&P Total Market Index. The Index is one of nineteen S&P Select Industry Indices, each designed to measure the performance of a narrow sub-industry or group of sub-industries as defined by the GICS.The Health Care Index is a modified equal weight index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With the least expensive product in the space, this ETF has annual operating expenses of 0.35%.
XHE's 12-month trailing dividend yield is 0.02%.
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.
XHE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
Taking into account individual holdings, Dexcom Inc. (DXCM - Free Report) accounts for about 1.82% of the fund's total assets, followed by Glaukos Corp (GKOS - Free Report) and Insulet Corporation (PODD - Free Report) .
The top 10 holdings account for about 17.55% of total assets under management.
Performance and Risk
XHE has gained about 10.84% so far this year, and as of 04/21/2018, it's up approximately 27.13% in the last one year. In the past 52-week period, the fund has traded between $56.42 and $72.27.
The fund has a beta of 0.90 and standard deviation of 16.59% for the trailing three-year period, which makes XHE a medium choice in this particular space. With about 71 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.
IShares U.S. Medical Devices ETF (IHI - Free Report) tracks Dow Jones U.S. Select Medical Equipment Index. The fund has $1.71 B in assets. IHI has an expense ratio of 0.44%.
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.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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