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Is SPDR S&P Health Care Equipment ETF (XHE) a Strong ETF Right Now?
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The SPDR S&P Health Care Equipment ETF (XHE - Free Report) made its debut on 01/26/2011, and is a smart beta exchange traded fund that provides 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.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $432.98 million, this makes it one of the average sized ETFs 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.
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.
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
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, Cryoport Inc. (CYRX - Free Report) accounts for about 1.60% of the fund's total assets, followed by Meridian Bioscience Inc. and Cerus Corporation (CERS - Free Report) .
XHE's top 10 holdings account for about 14.85% of its total assets under management.
Performance and Risk
So far this year, XHE has lost about -20.38%, and is down about -26.78% in the last one year (as of 08/03/2022). During this past 52-week period, the fund has traded between $79.20 and $133.34.
The ETF has a beta of 0.99 and standard deviation of 27.68% for the trailing three-year period, making it a medium risk choice in the space. With about 83 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 $1.96 million in assets, iShares U.S. Medical Devices ETF has $6.84 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.39%.
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?
The SPDR S&P Health Care Equipment ETF (XHE - Free Report) made its debut on 01/26/2011, and is a smart beta exchange traded fund that provides 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.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $432.98 million, this makes it one of the average sized ETFs 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.
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.
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
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, Cryoport Inc. (CYRX - Free Report) accounts for about 1.60% of the fund's total assets, followed by Meridian Bioscience Inc. and Cerus Corporation (CERS - Free Report) .
XHE's top 10 holdings account for about 14.85% of its total assets under management.
Performance and Risk
So far this year, XHE has lost about -20.38%, and is down about -26.78% in the last one year (as of 08/03/2022). During this past 52-week period, the fund has traded between $79.20 and $133.34.
The ETF has a beta of 0.99 and standard deviation of 27.68% for the trailing three-year period, making it a medium risk choice in the space. With about 83 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 $1.96 million in assets, iShares U.S. Medical Devices ETF has $6.84 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.39%.
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.