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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
XHE is managed by State Street Global Advisors, and this fund has amassed over $493.73 million, which makes it one of the average sized ETFs in the Health Care ETFs. This particular fund 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
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 0.02%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XHE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
Taking into account individual holdings, Abiomed Inc. (ABMD) accounts for about 2.05% of the fund's total assets, followed by Dexcom Inc. (DXCM - Free Report) and Intuitive Surgical Inc. (ISRG - Free Report) .
The top 10 holdings account for about 18% of total assets under management.
Performance and Risk
The ETF has added roughly 7.70% and is down about -10.65% so far this year and in the past one year (as of 04/12/2023), respectively. XHE has traded between $79.20 and $110.32 during this last 52-week period.
The fund has a beta of 0.94 and standard deviation of 26.49% for the trailing three-year period, which makes XHE a medium risk choice in this particular space. With about 83 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Health Care Equipment ETF is an excellent option for investors seeking to outperform the Health Care ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $2.05 million in assets, iShares U.S. Medical Devices ETF has $6.05 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?
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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
XHE is managed by State Street Global Advisors, and this fund has amassed over $493.73 million, which makes it one of the average sized ETFs in the Health Care ETFs. This particular fund 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
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 0.02%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XHE's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
Taking into account individual holdings, Abiomed Inc. (ABMD) accounts for about 2.05% of the fund's total assets, followed by Dexcom Inc. (DXCM - Free Report) and Intuitive Surgical Inc. (ISRG - Free Report) .
The top 10 holdings account for about 18% of total assets under management.
Performance and Risk
The ETF has added roughly 7.70% and is down about -10.65% so far this year and in the past one year (as of 04/12/2023), respectively. XHE has traded between $79.20 and $110.32 during this last 52-week period.
The fund has a beta of 0.94 and standard deviation of 26.49% for the trailing three-year period, which makes XHE a medium risk choice in this particular space. With about 83 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Health Care Equipment ETF is an excellent option for investors seeking to outperform the Health Care ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $2.05 million in assets, iShares U.S. Medical Devices ETF has $6.05 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.