What are medical device ETFs?
Medical device companies make the equipment and supplies that doctors and hospitals use to diagnose and treat patients, from surgical tools and implants to monitors and diagnostic tests. This guide covers three ETFs that focus on the industry: IHI, XHE and MDEV. Edwards Lifesciences appears in all three, at a median weight of 2.38%. Dexcom and Baxter International each appear in two of the three. All three are index funds. That means each one holds the stocks on a set list, called an index, instead of relying on a manager's picks. None of them uses leverage, inverse bets or options.
The funds differ most in how concentrated they are. IHI, from iShares, holds 46 stocks and puts 74.62% of its assets in its top ten. Abbott Laboratories (16.93%), Intuitive Surgical (15.09%) and Stryker (11.64%) lead the fund. XHE, from SPDR (State Street), tracks an index of U.S. health care equipment and supplies stocks. It holds 67 stocks, with 19.23% in its top ten. Its largest holding, Butterfly Network, is just 2.56%. First Trust's MDEV tracks the Indxx Medical Devices Index and holds 50 stocks, with 25.46% in its top ten.
The median expense ratio (the yearly fee, taken as a share of assets) is 0.37%. XHE has the lowest fee at 0.35% and IHI charges 0.37%. MDEV has the highest at 0.70%, nearly twice as much.
With only three funds, the five largest naturally hold 100% of the group's roughly $3.2 billion. The real concentration is in one fund. IHI holds about $3.0 billion, compared with about $151 million for XHE and about $1.9 million for MDEV.
Medical device ETF holdings: the stocks most funds own
The stocks that show up most often among the largest positions of the 3 biggest medical device ETFs with holdings reports, from their latest N-PORT filings.
| Stock | Funds holding it | Typical weight |
|---|---|---|
| Edwards Lifesciences Corporation | 3 of 3 | 2.38% |
| Dexcom, Inc. | 2 of 3 | 2.16% |
| Baxter International Inc. | 2 of 3 | 1.71% |
Typical weight is the median share of each fund’s assets in the stock, among the funds that hold it in their 25 largest positions.
The largest medical device ETFs, side by side
Swipe the table to see all 3 funds.
| IHI | XHE | MDEV | |
|---|---|---|---|
| Net assets | $3.02B | $151.4M | $1.9M |
| Expense ratio | 0.37% | 0.35% | 0.7% |
| Holdings | 46 | 67 | 50 |
| In the 10 largest | 74.62% | 19.23% | 25.46% |
| Biggest holding | Abbott Laboratories (16.93%) | Butterfly Network Inc (2.56%) | West Pharmaceutical Services Inc (2.86%) |
| Yield | 0.48% | 0.02% | 0.09% |
| 1-year return | -12.2% | +14.1% | +4.2% |
| 3 years, a year | +7.5% | +11.7% | +10.3% |
| 5 years, a year | -2.9% | -5.6% | -3.5% |
| Worst drop, past year | -26.1% | -18.3% | -18.1% |
| Launched | 2006 | 2011 | 2021 |
The largest ordinary funds by net assets (leveraged and inverse funds are listed further down). Holdings from each fund’s latest N-PORT report; returns include reinvested distributions, as of Oct 27, 2026.
Head to head
IHI vs XHE
IHI and XHE share 45 stocks, yet only 36% of their assets overlap because they weight those stocks differently. IHI puts 74.62% in its top ten, led by Abbott Laboratories at 16.93%. XHE holds 67 stocks, with 19.23% in its top ten and Butterfly Network largest at 2.56%. Fees are close: 0.35% for XHE, 0.37% for IHI. As of May 16, 2025, IHI returned 11.3% over one year versus -4.5% for XHE. Its deepest drop over that year was 16.6%, versus 24.4%. IHI may suit investors comfortable relying on a few industry leaders; XHE, those wanting a wider spread.
IHI vs MDEV
This pair overlaps least: 31.2% of assets, with 20 stocks in common. IHI puts 74.62% in its top ten, led by Abbott Laboratories at 16.93%. MDEV holds 50 stocks, with 25.46% in its top ten and West Pharmaceutical Services largest at 2.86%. MDEV charges 0.70%, nearly double IHI's 0.37%. It has about $1.9 million in assets against IHI's $3.0 billion. As of May 16, 2025, IHI returned 11.3% over one year and MDEV -3.1%. Their deepest drops were 16.6% and 20.2%. IHI may suit those focused on industry leaders; MDEV, those wanting a more even spread.
XHE vs MDEV
XHE and MDEV both spread their money widely. XHE holds 67 stocks with 19.23% in its top ten, and MDEV holds 50 with 25.46%. They share 22 stocks, and 35.9% of their assets overlap. XHE costs 0.35% versus 0.70% and is far larger, at about $151 million against $1.9 million. As of May 16, 2025, MDEV returned -3.1% over one year and XHE -4.5%. MDEV's deepest drop was smaller, 20.2% versus 24.4%. In the 2022 market downturn, MDEV fell 38.1% and XHE 31.3%. Both may suit investors seeking exposure beyond the largest device makers.
How much do the largest medical device ETFs overlap?
Owning two funds that hold the same stocks adds little diversification. Overlap here is the share of assets two funds have in common: for each stock both own, the smaller of its two weights, added up.
From each fund’s full holdings in its latest N-PORT report.
How have medical device ETFs performed?
The five largest ordinary funds: growth from the start of the range, distributions reinvested. The dashed gray line is the S&P 500 (SPY).
How medical device ETFs did in past market crashes
| Fund | 2008 crash | 2020 crash | 2022 drop |
|---|---|---|---|
| IHI | -48.9% | -32.9% | -27.4% |
| XHE | not yet launched | not yet launched | -31.3% |
| MDEV | not yet launched | not yet launched | -38.1% |
| S&P 500 (SPY) | -55.2% | -33.7% | -24.5% |
Total return from the stock market’s peak to its low in each fall, distributions reinvested.
What drives medical device ETFs?
Medical device makers earn money when hospitals, clinics and patients use their products, so the number of procedures performed matters. When patients put off non-urgent surgery, demand for implants and surgical tools can slip. Regulation is another driver. New products need government approval, and a recall or failed clinical trial can hit a single company hard. Payment rates set by Medicare and private insurers shape what hospitals can afford to spend. Interest rates matter too. They weigh most on smaller companies that are not yet profitable and need to raise money, and on stocks priced on hopes of future growth.
Past downturns show mixed results. In the 2008 financial crisis, IHI fell 48.9%. That was less than the S&P 500, a broad index of large U.S. companies, which fell 55.2%. In the 2020 COVID-19 crash, IHI fell 32.9% and XHE 34.2%, close to the S&P 500's 33.7%. The 2022 downturn was harder on these funds: IHI fell 27.4%, XHE 31.3% and MDEV 38.1%, all more than the S&P 500's 24.5%. XHE and MDEV, which spread money more evenly, fell furthest. XHE launched in 2011 and MDEV in 2021, so neither has a 2008 record, and MDEV has none for 2020.
Medical device ETFs with the lowest expense ratios
| # | Fund | Expense ratio | On $10,000 | Net assets |
|---|---|---|---|---|
| 1 | XHE SPDR S&P Health Care Equipment ETF | 0.35% | $35 a year | $151.4M |
| 2 | IHI iShares U.S. Medical Devices ETF | 0.37% | $37 a year | $3.02B |
Ordinary funds with at least $10 million in net assets. The median ordinary medical device ETF charges 0.37% a year; leveraged and inverse funds usually charge more.
Do medical device ETFs pay dividends?
3 of the 3 ordinary medical device ETFs with a page here paid distributions over the last 12 months, with a median yield of 0.09%.
| Highest yields | Yield | Net assets |
|---|---|---|
| IHI iShares U.S. Medical Devices ETF | 0.48% | $3.02B |
| XHE SPDR S&P Health Care Equipment ETF | 0.02% | $151.4M |
Distributions over the last 12 months divided by the price; funds with at least $25 million in net assets.
How to choose a medical device ETF
- Fees range from 0.35% to 0.70%. XHE costs the least at 0.35% a year, with IHI close behind at 0.37%. MDEV charges 0.70%, nearly twice as much, and fee gaps add up over long holding periods.
- A few giants or a wide spread. IHI puts 74.62% of its assets in its top ten holdings, led by Abbott Laboratories at 16.93%. XHE's top ten make up 19.23% and MDEV's 25.46%, so no single company dominates either fund.
- Different indexes, different stock lists. IHI tracks an index of U.S. medical device stocks. XHE draws on equipment and supplies companies from a U.S. total market index. MDEV follows the Indxx Medical Devices Index. Any two of them share only 31.2% to 36% of their assets.
- U.S.-only or wider reach. The objectives of IHI and XHE limit them to U.S. stocks. MDEV's stated objective does not mention a U.S. limit, and its top holdings include Demant A/S. Any non-U.S. holdings add currency risk.
- Fund size and trading costs. IHI holds about $3.0 billion, XHE about $151 million and MDEV about $1.9 million. Very small funds can have wider gaps between quoted prices and a higher chance of closing, which can trigger taxes in taxable accounts.
- No leveraged or option-income versions. None of the three uses leverage, inverse bets or options. Each one simply holds the stocks in its index, so comparisons come down to fees, holdings and size.
What are the risks of medical device ETFs?
- Three stocks drive much of IHI. Abbott Laboratories (16.93%), Intuitive Surgical (15.09%) and Stryker (11.64%) lead IHI, and its top ten total 74.62%. Trouble at one of these companies, such as a product recall, would hit the fund hard.
- One industry, shared pressures. All three funds depend on a single industry. Changes to device approval rules, Medicare or insurer payment rates, or hospital budgets can hurt many holdings at once, and no other sectors are there to offset the damage.
- Sharp one-year drops, especially in XHE. As of May 16, 2025, XHE's one-year volatility (how much its price swings) was 21.6%, versus 18.3% for IHI and 17.3% for MDEV. XHE fell as much as 24.4%, MDEV 20.2% and IHI 16.6%.
- Not always a shelter in downturns. Health care is often seen as defensive, meaning it tends to hold up when markets fall. Yet in the 2022 downturn IHI fell 27.4%, XHE 31.3% and MDEV 38.1%, all more than the S&P 500's 24.5%.
- MDEV's very small size. MDEV has about $1.9 million in net assets. A fund this small may close, which returns cash to shareholders at a time they did not choose and can create a taxable gain. Trading costs can also be higher.
List of all medical device ETFs, by size
Questions investors ask about medical device ETFs
What is the largest medical device ETF?
IHI, the iShares U.S. Medical Devices ETF, is by far the largest, with about $3.0 billion in net assets. That is most of the roughly $3.2 billion held by the three medical device ETFs covered here. XHE, the SPDR S&P Health Care Equipment ETF, comes next at about $151 million, and First Trust's MDEV has about $1.9 million. IHI is also the oldest of the three. It launched in May 2006.
What is the cheapest medical device ETF?
XHE, the SPDR S&P Health Care Equipment ETF, has the lowest expense ratio at 0.35% a year. The expense ratio is the yearly fee, taken as a share of the money invested. IHI is close behind at 0.37%, which is also the group's median. MDEV charges 0.70%, nearly twice as much. Fees are only part of the picture: XHE and IHI cost about the same but hold very different mixes of companies.
IHI vs XHE: what is the difference?
The biggest difference is concentration. IHI holds 46 stocks and puts 74.62% of its assets in its top ten, led by Abbott Laboratories, Intuitive Surgical and Stryker. XHE holds 67 stocks with 19.23% in its top ten, and its largest, Butterfly Network, is just 2.56%. Only 36% of their assets overlap. Fees are similar: 0.37% for IHI and 0.35% for XHE. As of May 16, 2025, IHI returned 11.3% over one year and XHE -4.5%.
Do medical device ETFs pay dividends?
Two of the three do, but the amounts are very small. IHI yields 0.43% and XHE 0.04%, and no yield is listed for MDEV. A yield is the yearly income a fund pays out, as a share of its price. At these levels the funds provide almost no cash income. Retirees who draw on portfolio income would get very little from them.
Which medical device ETFs hold Edwards Lifesciences?
All three do: IHI, XHE and MDEV. Edwards Lifesciences has a median weight of 2.38% across them. It is among IHI's five largest holdings at 4.75%, so a move in its stock affects IHI more than the others. Dexcom and Baxter International are also widely held. Each appears in two of the three funds.
How many medical device ETFs are there?
This guide covers three: IHI from iShares, XHE from SPDR (State Street) and MDEV from First Trust. Together they hold about $3.2 billion. All three track indexes, and none uses leverage, inverse bets or options. They differ mainly in concentration, cost and size. At one end is IHI, with about $3.0 billion and 74.62% in its top ten. At the other is MDEV, with about $1.9 million and a 0.70% fee.
Which medical device ETF has had the highest returns?
IHI, in the data available. As of May 16, 2025, IHI returned 11.3% over one year, with a three-year return of 6.6% and a five-year return of 8.4%. XHE's figures were -4.5%, -1.7% and -0.2%. MDEV launched in 2021 and returned -3.1% over one year and 2.3% over three years. IHI's results lean heavily on a few large holdings, such as Abbott Laboratories and Intuitive Surgical. Past returns do not predict future results.
Do medical device ETFs hold up better in a stock market crash?
Sometimes, but not reliably. In the 2008 financial crisis, IHI fell 48.9% while the S&P 500 fell 55.2%. In the 2020 COVID-19 crash, IHI (-32.9%) and XHE (-34.2%) roughly matched the S&P 500's 33.7% drop. In the 2022 downturn, all three fell more than the S&P 500's 24.5%: IHI by 27.4%, XHE by 31.3% and MDEV by 38.1%. A fund that holds a single industry can fall harder than the broad market.
Is there a Vanguard, Fidelity or Schwab medical device ETF?
No. None of the three offers a medical device ETF. The largest medical device ETFs come from iShares (IHI), SPDR (State Street) (XHE) and First Trust (MDEV), and customers of all three firms can buy other companies’ ETFs in their brokerage accounts. For a broader fund, VHT (Vanguard Health Care ETF) and FHLC (Fidelity MSCI Health Care Index ETF) are covered in our healthcare ETF guide.
