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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) was launched on 01/26/2011, and is a smart beta exchange traded fund designed to offer 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by State Street Global Advisors, XHE has amassed assets over $260.47 million, making it one of the average sized ETFs in the Health Care ETFs. Before fees and expenses, this particular fund 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
XHE's 12-month trailing dividend yield is 0.03%.
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.
For XHE, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Taking into account individual holdings, Ufp Technologies Inc (UFPT - Free Report) accounts for about 1.93% of the fund's total assets, followed by Shockwave Medical Inc (SWAV - Free Report) and Silk Road Medical Inc (SILK - Free Report) .
Its top 10 holdings account for approximately 17.54% of XHE's total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Health Care Equipment ETF has gained about 1.36% so far, and is down about -11.96% over the last 12 months (as of 05/10/2024). XHE has traded between $66.75 and $99.07 in this past 52-week period.
XHE has a beta of 0.98 and standard deviation of 26.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 70 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 $3.04 million in assets, iShares U.S. Medical Devices ETF has $5.28 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?
The SPDR S&P Health Care Equipment ETF (XHE - Free Report) was launched on 01/26/2011, and is a smart beta exchange traded fund designed to offer 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by State Street Global Advisors, XHE has amassed assets over $260.47 million, making it one of the average sized ETFs in the Health Care ETFs. Before fees and expenses, this particular fund 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
XHE's 12-month trailing dividend yield is 0.03%.
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.
For XHE, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Taking into account individual holdings, Ufp Technologies Inc (UFPT - Free Report) accounts for about 1.93% of the fund's total assets, followed by Shockwave Medical Inc (SWAV - Free Report) and Silk Road Medical Inc (SILK - Free Report) .
Its top 10 holdings account for approximately 17.54% of XHE's total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Health Care Equipment ETF has gained about 1.36% so far, and is down about -11.96% over the last 12 months (as of 05/10/2024). XHE has traded between $66.75 and $99.07 in this past 52-week period.
XHE has a beta of 0.98 and standard deviation of 26.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 70 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 $3.04 million in assets, iShares U.S. Medical Devices ETF has $5.28 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.