As highlighted by the 15.6% year-to-date gain for the Health Care Select Sector SPDR (NYSEArca: XLV), the health care sector is the S&P 500’s top performer this year.
XLV, the largest health care ETF by assets, is up 2.8% over the past month. That move has helped solidify XLV’s status as the best performer of the nine sector SPDR ETFs. XLV entered Thursday’s session with a 2014 gain of 15.6%, indicating the ETF has recently been separating itself from its nearest rivals, the Energy Select Sector SPDR (NYSEArca: XLE) and the Utilities Select Sector SPDR (NYSEArca: XLU), which are up an average of 13.6% this year. [Technical Take on a Big Health Care ETF]
For the investor that prefers strategic beta, or non-cap weighted sector exposure, the First Trust Health Care AlphaDEX Fund (NYSEArca: FXH) merits a place in the health care ETF conversation. FXH has proven as much, surging 17% year-to-date on its weight to a new all-time high on Thursday. Like XLV, FXH has been a prolific asset gatherer in the third quarter as investors have again embraced the idea of adding some risk to their health care holdings.
While XLV has added almost $180 million in new assets since the start of July, FXH has tacked on a not-too-shabby $140.1million. Somewhat quietly, FXH has added $505.1 million in fresh assets this year, a figure that works out to be over 22% of the ETF’s current assets under management total of $2.25 billion. [Investors Get Tactical With Sector ETFs]
As a strategic beta ETF, FXH differs noticeably from its cap-weighted counterparts, such as XLV.
“FXH’s portfolio also has more of a small- and mid-cap tilt than its competitors, with fully 47% of assets invested in mid-cap firms and another 9% devoted to small-cap companies,” said Morningstar analyst Robert Goldsborough in a new research note.