“Hospitals are the big winners in the Affordable Care Act because more people — up to 27 million – could end up buying insurance and going for procedures. Unlike in times past, the hospitals won’t have to do a lot of those procedures for free,” reports Eric Balchunas for Bloomberg.
That is good news for companies like HCA Holdings (NYSE: HCA), Tenet Healthcare (NYSE: THC) and Community Health Systems, as Bloomberg noted. All three are top-10 holdings in XHS.
Although in modest fashion, investors are starting to take note of XHS. Nearly as soon as it became apparent that Obamacare was here to stay, IHF was unearthed as a prime beneficiary of that news. XHS is just two years old, but the ETF has hauled in almost 63% of its AUM total since the start of the year. By comparison, IHF’s assets have grown by 21% this year. [An Obamacare ETF Winner]
XHS may have a small AUM total (for now) and light daily volume (less than 5,100 shares for the trailing three months), but the ETF is not illiquid. In the second and third quarters, XHS never traded at more than a half a percent discount or premium to its net asset value, according to State Street data.
Since XHS debuted two years ago, it “has had a 77 percent return, 12 percent more than the broad health-care sector,” Bloomberg reported.
Importantly, an investment in XHS does not mean investors need to trade in a broader health care ETF. Rather, XHS can act as a complement to broader health care funds because ETF like the Health Care Select Sector SPDR (NYSEArca: XLV) and Vanguard Health Care ETF (NYSEArca: VHT) feature scant exposure to hospital stocks.
SPDR S&P Health Care Services ETF Trends
ETF Trends editorial team contributed to this post.