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Is SPDR S&P Health Care Equipment ETF (XHE) a Strong ETF Right Now?
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Designed to provide broad exposure to the Health Care ETFs category of the 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $532.16 million, making it one of the average sized ETFs in the Health Care ETFs. XHE seeks to match the performance of the S&P Health Care Equipment Select Industry Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for XHE are 0.35%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.01%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
XHE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
When you look at individual holdings, Irhythm Technologies Inc. (IRTC - Free Report) accounts for about 1.92% of the fund's total assets, followed by Cryoport Inc. (CYRX - Free Report) and Conmed Corporation (CNMD - Free Report) .
Its top 10 holdings account for approximately 14.91% of XHE's total assets under management.
Performance and Risk
So far this year, XHE has lost about -8.76%, and is down about -7.18% in the last one year (as of 03/29/2022). During this past 52-week period, the fund has traded between $97.04 and $133.34.
The fund has a beta of 0.93 and standard deviation of 25.40% for the trailing three-year period, which makes XHE a medium risk choice in this particular space. With about 88 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 $2.22 million in assets, iShares U.S. Medical Devices ETF has $7.99 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.41%.
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?
Designed to provide broad exposure to the Health Care ETFs category of the 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $532.16 million, making it one of the average sized ETFs in the Health Care ETFs. XHE seeks to match the performance of the S&P Health Care Equipment Select Industry Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for XHE are 0.35%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.01%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
XHE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
When you look at individual holdings, Irhythm Technologies Inc. (IRTC - Free Report) accounts for about 1.92% of the fund's total assets, followed by Cryoport Inc. (CYRX - Free Report) and Conmed Corporation (CNMD - Free Report) .
Its top 10 holdings account for approximately 14.91% of XHE's total assets under management.
Performance and Risk
So far this year, XHE has lost about -8.76%, and is down about -7.18% in the last one year (as of 03/29/2022). During this past 52-week period, the fund has traded between $97.04 and $133.34.
The fund has a beta of 0.93 and standard deviation of 25.40% for the trailing three-year period, which makes XHE a medium risk choice in this particular space. With about 88 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 $2.22 million in assets, iShares U.S. Medical Devices ETF has $7.99 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.41%.
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.