Should You Invest in the iShares U.S. Medical Devices ETF (IHI)?

Looking for broad exposure to the Healthcare - Medical Devices segment of the equity market? You should consider the iShares U.S. Medical Devices ETF (IHI), a passively managed exchange traded fund launched on May 1, 2006.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 $3.44 billion, making it one of the larger 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.37%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.45%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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.

The top 10 holdings account for about 74.74% of total assets under management.

Performance and Risk

So far this year, IHI has lost about 12.46%, and is down about 12.26% in the last one year (as of 09/02/2026). During this past 52-week period, the fund has traded between $47.55 and $64.47.

The ETF has a beta of 0.81 and standard deviation of 17.94% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.

Alternatives

iShares U.S. Medical Devices ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IHI is a reasonable option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.

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 $3.17 million in assets, State Street SPDR S&P Health Care Equipment ETF has $179.89 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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This article originally published on Zacks Investment Research (zacks.com).

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