3 Best Medical Device ETFs to Buy 2024

Summary: The healthcare industry is never going away, as the need for health products, medications, and medical devices is simply the inevitable reality of our existence. In this guide, we present 3 of the best medical device ETFs based on volume that you can invest in and diversify your portfolio. To invest in the ETFs on our list, you can open a trading account with an online investment platform such as Interactive Brokers.

What are medical device ETFs?

Medical devices include a wide range of products, for example, diagnostic equipment, screening devices, surgical instruments, etc. Thus, investing in medical device ETFs can be a solid way to gain exposure to a wider range of companies within the medical industry and diversify your portfolio without having to invest in individual stocks.

3 best medical device ETFs

The medical device market is valued at almost $640 billion as of January 2024, and it’s expected to grow to almost $900 billion by the end of the decade, according to some analysts. Thus, it’s hardly surprising that a growing number of investors are eyeing medical device stocks and ETFs.

As the market is large (and still growing), investors will have a lot of options at their disposal. The top 3 medical device ETFs to check out right now, however, are:

1. iShares U.S. Medical Devices ETF (IHI);
2. SPDR S&P Health Care Equipment ETF (XHE);
3. First Trust Indxx Medical Devices ETF (MDEV).

Let’s explore each of them in more detail.

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1. iShares U.S. Medical Devices ETF (IHI)

Net assets as of January 2024: ~$5.5 billion

Expense ratio as of January 2024: 0.40%

iShares U.S. Medical Devices ETF focuses on medical device manufacturers only. It comprises companies such as Abbott Laboratories (NYSE: ABT), Thermo Fisher Scientific (NYSE: TMO), Medtronic (NYSE: MDT), and other smaller-scale companies, at least compared to their major pharmaceutical competitors. As such, the IHI fund is positioned to provide investors with well-balanced exposure to the industry, especially investors seeking to diversify their overall exposure without investing in major players in the industry.

IHI price today

Your capital is at risk.

2. SPDR S&P Health Care Equipment ETF (XHE)

Net assets as of January 2024: ~$350 million

Expense ratio as of January 2024: 0.35%

SPDR S&P Health Care Equipment ETF (XHE) has a rather narrow focus, specializing in healthcare equipment and supply manufacturers, such as Abiomed (NASDAQ: ABMD), Glaukos (NASDAQ: GKOS), and Silk Road Medical (NASDAQ: SILK). As such, it chiefly appeals to investors aiming to strategically orient their investments to match a specific sector of the market. However, the underlying index is well-crafted, so it’s a solid diversification choice for other kinds of investors as well. Note, though, that the fund is rather US-centric.

XHE price today

Your capital is at risk.

3. First Trust Indxx Medical Devices ETF (MDEV)

Net assets as of January 2024: ~$3 million

Expense ratio as of January 2024: 0.70%

First Trust Indxx Medical Devices ETF (MDEV) focuses on the top 50 companies by market capitalization in the medical device sector, or rather in companies that generate a minimum of 50% of their revenue by developing equipment, instruments, and machines used in the healthcare industry, all while boating a minimum market capitalization of $500 million. As such, the fund undergoes regular reconstitution and rebalancing to ensure it caters to investors with their sights on the top players in the sector.

MDEV price today

Your capital is at risk.

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Where to buy medical device ETFs?

ETFs are traded as stocks, so they’re available on a number of investor platforms online. To invest in medical device ETFs on our list, we recommend using Interactive Brokers, a platform offering: 

• Commission-free stock trading;
• Global stock-trading on 90+ market centers;
• Fractional shares available;
• Extra income on fully paid shares;
• Lowest financing rates for margin accounts in the industry;
• No account minimum. 

Pros and cons of investing in medical device ETFs

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about medical device ETFs

Is there an ETF for medical device companies?

Yes, there are ETFs tracking the performance of medical device companies. Some of them include iShares U.S. Medical Devices ETF, SPDR S&P Health Care Equipment ETF, and First Trust Indxx Medical Devices ETF.

Is IHI a good investment?

iShares U.S. Medical Devices ETF (IHI) can be a solid investment for investors looking to invest in smaller-scale companies within the medical device sector.

What is the best medical ETF?

Some of the best medical device ETFs to buy in 2024 based on volume are iShares U.S. Medical Devices ETF, SPDR S&P Health Care Equipment ETF, and First Trust Indxx Medical Devices ETF.

Are medical device ETFs a safe investment option?

ETFs are a safe investment if approached in the right way. They are traded like stocks, but they are inherently more diverse, so with a correct trading strategy, you can craft a robust portfolio to match your investment needs and respond well to market movements.

Where to buy medical device ETFs?

You can buy medical device ETFs on an online investment platform such as Interactive Brokers.

How to buy medical device ETFs?

To buy medical device ETFs, you can open an account with an online investment platform such as Interactive Brokers.