Shares of GE HealthCare Technologies Inc. are up more than 3.5% in mid-day trading Monday after the company delivered strong revenue growth in its first results as a public company.
The Chicago-based global medical technology company on Monday reported revenue growth of 7.6% to 4.94 billion during the fourth quarter, while profit dipped on an annual basis. The company said it expects sales to grow between 5% and 7% for the full year.
GE HealthCare spun off from General Electric Co after market close on January 3, with Boston-based GE retaining 20% ownership.
GE HealthCare said the revenue growth during the fourth quarter was driven by growth in imaging, patient care solutions, and ultrasound, according to a statement from the firm.
In a market cap-weighted healthcare sector ETF, GE HealthCare is given a weight of just 0.51% as of January 27. The sector is dominated by giants including UnitedHealth Group Incorporated (UNH), Johnson & Johnson (JNJ), Eli Lilly and Company (LLY), Merck & Co Inc (MRK), and AbbVie Inc. (ABBV).
Investors looking for more diverse exposure to healthcare, in which the smaller holdings including GE HealthCare have an equal impact on the index, will prefer the Invesco S&P 500 Equal Weight Health Care ETF (RYH).
In RYH, GE HealthCare is currently weighted 1.68% and is given the same weight as all other holdings at each rebalance. RYH is designed to offer more balanced exposure for the long-term investor since it has the added benefit of avoiding the potentially adverse impact of rallies or crashes in a specific sub-industry within healthcare.
RYH charges a 40 basis point expense ratio and has $1 billion in assets under management.
Investors looking for exposure to GE HealthCare and other companies that have been spun off from larger corporations within the past five years should instead consider the Invesco S&P Spin-Off ETF (CSD).
CSD gives GE HealthCare a weight of 4.65%, putting it in the fund’s top 10 constituents by weight. Other holdings in CSD include Dow Inc (DOW), Constellation Energy Corporation (CEG), Carrier Global Corp (CARR), Otis Worldwide Corporation (OTIS), and Corteva Inc (CTVA).
CSV charged 65 basis points and has $57 million in assets.
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