What Is the FXH ETF? A Complete Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
Smart beta healthcare investing built on the AlphaDEX methodology. It selects stocks based on fundamental metrics in pursuit of excess returns.
SubscribeWhat Is This ETF?
It tracks the StrataQuant Health Care Index and selects companies from the Russell 1000 healthcare sector with strong growth and value factors. Its defining feature is a proprietary quant model designed to overcome the limitations of market-cap weighting.
It suits investors who want more aggressive stock selection and greater exposure to small and mid-cap stocks than traditional healthcare indexes offer.
It is a passively managed (index-tracking) ETF launched by First Trust in 2007.
How Does It Invest?
| Item | Details |
|---|---|
| Tracked Index | StrataQuant Health Care Index |
| Management Style | Passive (Smart Beta) |
| Rebalancing Frequency | Quarterly |
| Dividend Frequency | Quarterly |
| Expense Ratio | 0.61% |
Stocks are ranked using a combination of growth factors, such as sales growth and price returns, and value factors, such as price-to-book ratio and return on assets. After selecting the top-ranked stocks above a certain threshold, the fund assigns tiered weights based on rank to build the portfolio.
- Quantitative stock selection based on fundamentals
- Prevents over-concentration in large pharmaceutical companies and keeps the portfolio balanced
Size and Costs
Assets under management (AUM) stand at $1.1B, and the expense ratio is 0.61% per year.
Compared with large-cap-focused ETFs such as XLV and VHT shown in the table, FXH has a relatively higher fee, but its differentiated stock selection logic produces a performance path that differs from the broader market.
Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeAs earnings divergence among individual healthcare companies deepens, the quant-based stock selection strategy has proven effective and has responded nimbly to changing market conditions.
Capital sometimes flows in as specific themes within the sector (such as obesity drugs and AI in medicine) rise and fall, and investment demand for both defensive qualities and growth potential remains steady.
Pros and Cons
Its proprietary selection model can uncover hidden quality stocks within the sector, but the higher fee relative to the index is worth considering.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products
XLV and VHT shown in the table are representative low-cost core healthcare ETFs that provide stable large-cap exposure. If you want to focus more on a specific subsector, you could consider IHI, which centers on medical devices, or XBI, which specializes in biotech. If you prefer broad sector exposure, FHLC and IYH can also be excellent alternatives, so it is important to choose according to your own investment style.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 XLV | State Street Health Care Select Sector SPDR ETF | $179.28 | +0.0% | $47.0B | 0.08% | 1.42% | +22.8% |
 VHT | Vanguard Health Care ETF | $332.71 | +0.1% | $20.0B | 0.09% | 1.39% | +22.0% |
 XBI | State Street SPDR S&P Biotech ETF | $150.47 | +0.6% | $10.4B | 0.35% | 0.36% | +38.8% |
 IYH | iShares U.S. Healthcare ETF | $75.42 | +0.0% | $4.5B | 0.37% | 1.06% | +22.5% |
 FHLC | Fidelity MSCI Health Care Index ETF | $86.00 | +0.0% | $3.8B | 0.08% | 1.18% | +22.4% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
 OGN | Organon & Co | 0.04% | $13.74 | -0.1% | $3.6B | 17.6 | 0.58% |
| HUM | Humana Inc | 0.03% | $417.22 | -1.1% | $50.1B | 39.5 | 0.88% |
| ELV | Elevance Health Inc | 0.03% | $431.32 | -2.0% | $93.2B | 18.4 | 1.59% |
| REGN | Regeneron Pharmaceuticals Inc | 0.03% | $807.67 | +0.3% | $83.1B | 20.0 | 0.44% |
 UHS | Universal Health Services Inc | 0.03% | $185.71 | -0.6% | $10.9B | 7.6 | 0.44% |
 MOH | Molina Healthcare Inc | 0.03% | $204.79 | -2.1% | $10.7B | - | - |
 SOLV | Solventum Corp | 0.03% | $85.81 | +0.5% | $14.6B | 10.5 | - |
| BSX | Boston Scientific Corp | 0.02% | $45.58 | -0.2% | $66.1B | 18.5 | - |
 ZBH | Zimmer Biomet Holdings Inc | 0.02% | $97.44 | -1.1% | $18.6B | 23.7 | 1.07% |
 GH | Guardant Health Inc | 0.02% | $173.25 | +2.5% | $23.3B | - | - |
Investor Checkpoints
These are the key points to review when considering an investment in FXH. You should look at the characteristics of the smart beta strategy, its cost structure, and the sector outlook together.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 📊 Selection Logic | Understanding the AlphaDEX methodology based on growth and value factors | Must check |
| 💵 Operating Costs | Assessing whether the fee level is reasonable compared with other ETFs in the same sector | Somewhat high |
| 💊 Sector Weights | Diversification across subindustries such as pharmaceuticals, biotech, and healthcare services | Balanced |
| 📈 Track Record | Whether it has achieved long-term excess returns versus traditional healthcare indexes | Volatile |
A clinical trial failure or regulatory change at a particular company can affect the entire portfolio, and given the nature of factor strategies, the fund may underperform for extended periods in certain market environments.
It is a smart beta solution suited to those seeking strategic healthcare exposure. For investors who place more weight on excess return potential than on cost, it is a product worth recommending as one pillar of a portfolio.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
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