FHLC vs XHE

FHLCAFidelity MSCI Health Care Index ETF

XHEBState Street SPDR S&P Health Care Equipment ETF

In short

FHLC Health care, whole market. FHLC tracks an MSCI index that runs from mega-cap pharma down to small-cap biotech and device makers, roughly 400 names, for 0.08% a year.

XHE Health care minus the pharma giants. XHE holds a focused basket of US medical device and supply makers at near-equal weight, so a small stent company gets roughly the same shelf space as an industry titan.

Stated mandate

FHLC The fund seeks to track the performance of the MSCI USA IMI Health Care Index before fees and expenses.

XHE The fund seeks to match, before fees and expenses, the total return performance of the S&P Health Care Equipment Select Industry Index and provide exposure to the health care equipment segment of the S&P TMI.

Why people hold it

• FHLC Charges 0.08% a year against a 0.50% median for broad health care ETFs. Only XLV matches that sticker; VHT sits a hair above.
• The IMI index it follows reaches for about 99% of US free-float market value, so smaller biotech and device names ride along with the pharma giants.msci.com
• Mirrors its benchmark closely, one of the tighter tracking jobs among broad health care funds. Distributions come quarterly.
• Fidelity has run it since 2013, and it has grown into a multi-billion-dollar fund with a plain vanilla index mandate.fidelity.com

• XHE Modified equal weighting, reset on a quarterly schedule, keeps any one giant from dominating the basket. Small and mid-cap device names carry real weight here.ssga.comspglobal.com
• 0.35% a year, below the median for health care ETFs in its peer group. Unusual for a slice this narrow, where issuers often charge up.
• A true pure play: equipment and supplies drawn from the S&P Total Market Index. No pharma, no insurers, no hospital chains diluting the theme.ssga.com
• Launched in 2011 by State Street, so this one has traded through more than a decade of device-sector cycles rather than arriving with the latest theme.

Worth knowing

• FHLC One sector, one country. Drug-pricing politics, patent cliffs and FDA rulings move the whole portfolio at once.
• Free-float cap weighting means a handful of mega-cap insurers and drugmakers carry most of the weight; that long tail of small names counts for less than it looks.msci.com
• Moderately traded rather than the category's volume leader, so spreads matter more on large or hurried orders.

• XHE Broad health care ETFs like VHT, FHLC and XLV charge a fraction of this. The targeted device basket is what the extra costs buy.
• Thinly traded next to the big sector funds, so spreads can widen when markets move fast.
• One sub-industry, tilted toward smaller companies, and SSGA notes the fund can become non-diversified purely from index weight shifts.ssga.com

Full FHLC profile⁠

Full XHE profile⁠