Launched on May 1, 2006, the iShares U.S. Medical Devices ETF (IHI) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Medical Devices segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Medical Devices is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $3.62 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Medical Devices segment of the equity market. IHI seeks to match the performance of the Dow Jones U.S. Select Medical Equipment Index before fees and expenses.
The Dow Jones U.S. Select Medical Equipment Index measures the performance of the medical equipment sector of the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.38%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.36%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.
Looking at individual holdings, Abbott Laboratories (ABT) accounts for about 16.52% of total assets, followed by Intuitive Surgical Inc (ISRG) and Boston Scientific Corp (BSX).
The top 10 holdings account for about 74.33% of total assets under management.
Performance and Risk
The ETF has lost about 4.49% and is down about 8.12% so far this year and in the past one year (as of 02/23/2026), respectively. IHI has traded between $54.27 and $64.7 during this last 52-week period.
The ETF has a beta of 0.93 and standard deviation of 16.34% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
iShares U.S. Medical Devices ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IHI is an excellent option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
First Trust Indxx Medical Devices ETF (MDEV) tracks INDXX MEDICAL DEVICES INDEX and the State Street SPDR S&P Health Care Equipment ETF (XHE) tracks S&P Health Care Equipment Select Industry Index. First Trust Indxx Medical Devices ETF has $2.06 million in assets, State Street SPDR S&P Health Care Equipment ETF has $147.93 million. MDEV has an expense ratio of 0.7%, and XHE charges 0.35%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares U.S. Medical Devices ETF (IHI): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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