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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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
XHE is managed by State Street Global Advisors, and this fund has amassed over $215 million, which makes it one of the average sized ETFs in the Health Care ETFs. 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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
The fund has a 12-month trailing dividend yield of 0.04%.
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.
This ETF has heaviest allocation in the Healthcare sector - about 100% of the portfolio.
Taking into account individual holdings, Integra Lifesciences Holding (IART - Free Report) accounts for about 2.46% of the fund's total assets, followed by Alphatec Holdings Inc (ATEC - Free Report) and Masimo Corp (MASI - Free Report) .
XHE's top 10 holdings account for about 21.34% of its total assets under management.
Performance and Risk
The ETF has added roughly 6.39% so far this year and is up about 21.07% in the last one year (as of 11/21/2024). In the past 52-week period, it has traded between $74 and $93.79.
The ETF has a beta of 0.97 and standard deviation of 26.01% for the trailing three-year period, making it a medium risk choice in the space. With about 66 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 MEDICAL DEVICES 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 $3.13 million in assets, iShares U.S. Medical Devices ETF has $4.89 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.40%.
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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
XHE is managed by State Street Global Advisors, and this fund has amassed over $215 million, which makes it one of the average sized ETFs in the Health Care ETFs. 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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
The fund has a 12-month trailing dividend yield of 0.04%.
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.
This ETF has heaviest allocation in the Healthcare sector - about 100% of the portfolio.
Taking into account individual holdings, Integra Lifesciences Holding (IART - Free Report) accounts for about 2.46% of the fund's total assets, followed by Alphatec Holdings Inc (ATEC - Free Report) and Masimo Corp (MASI - Free Report) .
XHE's top 10 holdings account for about 21.34% of its total assets under management.
Performance and Risk
The ETF has added roughly 6.39% so far this year and is up about 21.07% in the last one year (as of 11/21/2024). In the past 52-week period, it has traded between $74 and $93.79.
The ETF has a beta of 0.97 and standard deviation of 26.01% for the trailing three-year period, making it a medium risk choice in the space. With about 66 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 MEDICAL DEVICES 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 $3.13 million in assets, iShares U.S. Medical Devices ETF has $4.89 billion. MDEV has an expense ratio of 0.70% and IHI charges 0.40%.
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.