This ETF offers targeted exposure to health care services companies, a narrow slice of the U.S. economy that includes health care service providers, managed health care firms, health care facilities, and health care distributors. The health care sector may be appealing to investors looking to add stability to their portfolio, and this corner of the market is also capable of delivering solid distribution yields to investors. Given the relatively narrow focus, this fund probably is of little use to investors building a long-term, buy-and-hold portfolio; it will be more useful to those looking to establish a tactical tilt within their portfolios.
There are a couple aspects of XHS that make this product noteworthy and unique from competing funds. First, the underlying index is equal weighted, a feature that results in a well balanced portfolio. That should be appealing to investors for a number of reasons, including the potential to avoid market cap weighting methodologies that some believe contain potential drawbacks to long-term performance.
There are a number of broad-based funds in the Health & Biotech ETFdb Category that offer similar exposure to this corner of the market. For investors looking to achieve targeted exposure to health care services stocks, XHS is an efficient way to tap into this corner of the market.