The SPDR S&P Health Care Equipment ETF (
XHE Quick Quote XHE - Free Report) was launched on 01/26/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Medical Devices segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Medical Devices is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $410.81 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Medical Devices segment of the equity market. 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.
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.
It has a 12-month trailing dividend yield of 0.02%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Lantheus Holdings Inc (
LNTH Quick Quote LNTH - Free Report) accounts for about 2.45% of total assets, followed by Irhythm Technologies Inc. ( IRTC Quick Quote IRTC - Free Report) and Glaukos Corp ( GKOS Quick Quote GKOS - Free Report) .
The top 10 holdings account for about 16.85% of total assets under management.
Performance and Risk
The ETF has lost about -28.69% and is down about -27.90% so far this year and in the past one year (as of 05/11/2022), respectively. XHE has traded between $84.69 and $133.34 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 26.42% for the trailing three-year period, making it a medium risk choice in the space. With about 88 holdings, it effectively diversifies company-specific risk.
SPDR S&P Health Care Equipment ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XHE is a sufficient option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
First Trust Indxx Medical Devices ETF (
MDEV Quick Quote MDEV - Free Report) tracks INDXX GLOBAL MEDICAL EQUIPMENT INDEX and the iShares U.S. Medical Devices ETF ( IHI Quick Quote IHI - Free Report) tracks Dow Jones U.S. Select Medical Equipment Index. First Trust Indxx Medical Devices ETF has $1.84 million in assets, iShares U.S. Medical Devices ETF has $6.86 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.41%. Bottom Line
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