Equity: U.S. Health Care Equipment & Supplies

XHE Top Performer Intra-day
Price $60.81
Today’s Change +0.64%(1.06)
11:50am 08/22/2017
IHI Bottom Performer Intra-day
Price $164.47
Today’s Change +1.13%(0.69)
12:02pm 08/22/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

The US Health Care Equipment & Supplies segment offers investors exposure to a narrow subsector within the larger US health care space, focused specifically on companies engaged in the2/3 of XHE is weighted in small- or micro-cap companies. manufacturing and distribution of medical equipment and supplies. While there may be significant overlap in holdings between the two existing funds in the segment—the SPDR S&P Health Care Equipment ETF (XHE) and the iShares Dow Jones U.S. Medical Devices ETF (IHI)—the two portfolios are markedly different in exposure.
IHI is a cap-weighted fund holding 50 stocks and its top holdings are jam-packed with large-cap names like Medtronic, Covidien, Intuitive Surgical and Stryker. In fact, it's highly concentrated, with the top 10 holdings accounting for almost 2/3 of the fund's total weighting. XHE, in contrast, holds more names in equal weights. This tilts the fund smaller in cap; 2/3 of XHE is weighted in small- or micro-cap companies.
IHI, launched in 2006, is clearly the more established of the two funds, and is our analyst pick for the segment. IHI has a large, stable AUM, while XHE, which launched in January 2011, has been slow to gather steam. While XHE charges less than IHI, its trading costs may be higher due to poor liquidity. (Insight updated 08/22/17)

All Funds (2)

IHI $1.41 B 1408053920 Concentrated but marketlike

A 93
E
92
92
T
96
96
F
93
93

XHE $144.18 M 144178917.6 Thinly traded, small-cap tilt

A 67
E
94
94
T
82
82
F
67
67

ETF.com Grade as 08/17/17

Equity: U.S. Health Care Equipment & Supplies

1 Year Total Return NAV
Performance  [as of 08/21/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: Thomson Reuters US Healthcare Equipment & Supplies-2.66%3.19%23.05%13.15%16.07%20.18%--
A 92.831557IHI1408053920IHIiShares U.S. Medical Devices ETF-3.01%4.12%22.82%13.72%17.75%20.91%11.62%
A 66.92677XHE144178917.6XHESPDR S&P Health Care Equipment ETF-2.70%6.09%21.00%17.05%19.66%18.98%--
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

Both IHI and XHE are very efficient funds. XHE is the cheaper of the two. Still, IHI keeps up with XHE's Efficiency score due to its tight tracking, tax efficiency and size.
On theXHE is the cheaper of the two tax-efficiency front, IHI is the standout—it has never paid out capital gains distributions since its inception in June 2006. XHE has already paid out capital gains three times in its comparatively short trading history—likely due to its equal-weighing scheme and frequent rebalancing. Investors should also be cognizant of XHE’s low assets under management, though we don't currently see elevated closure risk. IHI is the more established fund, with plenty of assets and little or no risk of closure. (Insight updated 08/22/17)

All Funds (2)

94
94.37202
92
92.107349

ETF.com Grade as 08/17/17

Equity: U.S. Health Care Equipment & Supplies

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
IHI iShares U.S. Medical Devices ETF 0.44% -0.53% -0.43% -0.60% 20.00% / 39.60% Low 92.107349
XHE SPDR S&P Health Care Equipment ETF 0.35% -0.33% -0.09% -0.45% 20.00% / 39.60% Low 94.37202

ETF.com Tradability Insight

For investors concerned about liquidity, IHI is clearly the better choice here. XHE is somewhat illiquid, with lackluster volume and wide spreads, making limit orders necessary to controlFor investors concerned about liquidity, IHI is clearly the better choice. trading costs. IHI's liquidity looks nearly perfect by comparison. For institutional traders, IHI also has the best block liquidity, meaning larger blocks can be traded with minimal cost and relative ease if done through a liquidity provider. (Insight updated 08/22/17)

All Funds (2)

96
95.990465
82
82.062228

ETF.com Grade as 08/17/17

Equity: U.S. Health Care Equipment & Supplies

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
IHI iShares U.S. Medical Devices ETF $16.32 M 0.04% 1.97 100.00% 0.26% 0.00% None 95.990465
XHE SPDR S&P Health Care Equipment ETF $874.67 K 0.26% 0.28 100.00% 0.30% 0.01% None 82.062228
Spread History
Premium/Discount History

ETF.com/ Block Liquidity

IHI
5
4
3
2
1
XHE
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

While the two funds target a similar sector within the US health care space and carry significant holdings overlap, their portfolios are markedly different. XHE’s equal-weightingIHI is cap weighted, helping it score relatively well in Fit. scheme tilts the fund extremely small, although the fund doesn't take on much additional market risk. In fact, over 2/3 of XHE is weighted in small- and micro-caps.
Like our Thomson Reuters benchmark, IHI is cap weighted, helping it score relatively well in Fit. IHI tilts larger, with over 60% of the fund’s total weighting coming from its top 10 holdings, which consists of established large-cap names in the sector, including Medtronic, Covidien, Thermo Fisher and Stryker—it even carries a growth component, heavily weighting companies like Intuitive Surgical.
While the volatility associated with this narrow sector may be hard to stomach for some investors, both IHI and XHE provide great alternative plays for those health care investors looking to shy away from the heavy hand of big pharma and health care providers, both of which dominate the broader health care segment. (Insight updated 08/22/17)

All Funds (2)

93
92.831557
67
66.92677

ETF.com Grade as 08/17/17

Equity: U.S. Health Care Equipment & Supplies