FXH vs XHS

FXHBFirst Trust Health Care AlphaDEX Fund

XHSAState Street SPDR S&P Health Care Services ETF

In short

FXH A 2007-vintage twist on health care: instead of owning the whole sector, FXH runs Russell 1000 health care names through First Trust's AlphaDEX growth-and-value screen and holds roughly 80 of them.

XHS Most health care ETFs are pharma funds in disguise. XHS buys the delivery system instead: insurers, hospitals, distributors and clinics, roughly equal weighted so one giant insurer does not run the show.

Stated mandate

FXH The fund seeks before-fee results generally corresponding to the price and yield of the StrataQuant® Health Care Index. That index uses the AlphaDEX® methodology to select and weight health care stocks from the Russell 1000® Index.

XHS The fund seeks to track the total return of the S&P Health Care Services Select Industry Index before fees and expenses, providing targeted exposure to health care services companies.

Why people hold it

• FXH AlphaDEX selects and weights health care stocks from the Russell 1000 using growth and value marks. A published rules screen, not a manager's hunch.ftportfolios.com
• Live since 2007 and now a multi-billion-dollar fund. This is a long-running strategy with a real record, not a recent launch chasing a theme.
• A focused book of about 80 stocks, so the screen's picks actually show up in results rather than getting diluted across the full sector. Pays quarterly.

• XHS No drugmakers, no device makers. The index tracks four slices of care delivery: distributors, facilities, health care services and managed care.ssga.com
• Modified equal weighting spreads about 60 names across large, mid and small caps, so the portfolio is not a bet on two or three mega caps.ssga.com
• 0.35% a year sits below the 0.50% median for broad health care ETFs, on a fund that has been running since 2011.
• Ranks in the top quartile of the broad health care ETFs we grade.

Worth knowing

• FXH The 0.61% fee runs near double the typical multifactor fund's. Cheap core peers like IUSG and VONV charge a small fraction of it.
• Thinly traded for its size, so spreads can widen and fills on a market order may land away from the fund's underlying value.
• Fee load and volatility profile leave it in the bottom quartile of its multifactor peer group, a group topped by broad, low-cost core funds.

• XHS Cheap against the median, not against the giants: XLV, VHT and FHLC charge under a tenth of a percent for cap weighted whole sector exposure.
• Thinly traded next to the big sector funds, so spreads and limit orders matter more here.
• Leaving out pharma and biotech means it moves differently from a whole sector fund, and insurers and hospitals sit close to reimbursement policy.ssga.com

Full FXH profile⁠

Full XHS profile⁠