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Is SPDR S&P Health Care Equipment ETF (XHE) a Strong ETF Right Now?
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Making its debut on 01/26/2011, smart beta exchange traded fund SPDR S&P Health Care Equipment ETF (XHE - Free Report) provides investors broad exposure to the Health Care ETFs category of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Because the fund has amassed over $408.08 million, this makes it one of the average sized ETFs in the Health Care ETFs. XHE is managed by State Street Global Advisors. XHE, before fees and expenses, 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Healthcare sector.
When you look at individual holdings, Lantheus Holdings Inc (LNTH - Free Report) accounts for about 2.45% of the fund's total assets, followed by Irhythm Technologies Inc. (IRTC - Free Report) and Glaukos Corp (GKOS - Free Report) .
XHE's top 10 holdings account for about 16.85% of its total assets under management.
Performance and Risk
The ETF has lost about -25.45% so far this year and is down about -25.92% in the last one year (as of 06/02/2022). In the past 52-week period, it has traded between $82.86 and $133.34.
XHE has a beta of 0.99 and standard deviation of 26.81% for the trailing three-year period, which makes the fund a medium risk choice in the 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 $1.99 million in assets, iShares U.S. Medical Devices ETF has $6.94 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?
Making its debut on 01/26/2011, smart beta exchange traded fund SPDR S&P Health Care Equipment ETF (XHE - Free Report) provides investors broad exposure to the Health Care ETFs category of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Because the fund has amassed over $408.08 million, this makes it one of the average sized ETFs in the Health Care ETFs. XHE is managed by State Street Global Advisors. XHE, before fees and expenses, 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Healthcare sector.
When you look at individual holdings, Lantheus Holdings Inc (LNTH - Free Report) accounts for about 2.45% of the fund's total assets, followed by Irhythm Technologies Inc. (IRTC - Free Report) and Glaukos Corp (GKOS - Free Report) .
XHE's top 10 holdings account for about 16.85% of its total assets under management.
Performance and Risk
The ETF has lost about -25.45% so far this year and is down about -25.92% in the last one year (as of 06/02/2022). In the past 52-week period, it has traded between $82.86 and $133.34.
XHE has a beta of 0.99 and standard deviation of 26.81% for the trailing three-year period, which makes the fund a medium risk choice in the 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 $1.99 million in assets, iShares U.S. Medical Devices ETF has $6.94 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.