iShares US Medical Devices ETF’s Process Pillar rating is Average, but a strong management team still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy gets an Average Process Pillar rating.  High quality exposure is attributed to stocks with low financial leverage and strong returns on equity. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Abbott Labs

Intuitive Surgical

Stryker

Boston Scientific

Medtronic

Becton, Dickinson and Co.

Edwards Lifesciences

DexCom

IDEXX Laboratories

ResMed

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. iShares US Medical Devices ETF earns an Average Process Pillar rating. The largest contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. 

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the Dow Jones U.S. Select Medical Equipment Index composed of U.S. equities in the medical devices sector.  The fund will invest at least 80% of its assets in the component securities of the index and in investments that are substantially identical to the component securities of the index and may invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the index, and but which BFA believes will help the fund track the index. The fund is non-diversified. 

 The portfolio has allocations in its top two sectors, industrials and energy, that are similar to the category. The sectors with low exposure compared to category peers are healthcare and basic materials; however, the allocations are similar to the category. The portfolio is positioned across 57 holdings and is relatively concentrated. In particular, 71.3% of the strategy's assets are housed within the top 10 holdings, as opposed to the typical peer's 41.0%.

Average

Process

iShares US Medical Devices ETF's strong equity team drives the strategy's Above Average People Pillar rating. There are three managers listed on the fund: Greg Savage, Jennifer Hsui, Paul Whitehead. The team is well equipped, with an average of 18 years of portfolio management experience. Together, they manage a total of 258 strategies, with solid long-term prospects. The strategies average a Silver asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares U.S. Medical Devices ETF

IHI tracks a market-cap-weighted index of manufacturers and distributors of medical devices in the US.

BOSTON--(BUSINESS WIRE)-- #daisyaward--The Institute for Healthcare Improvement (IHI) and The DAISY Foundation have announced the recipients of the 10th annual DAISY Award®.

IHI and The DAISY Foundation™ Honor Extraordinary Nurses in Patient Safety

BOSTON--(BUSINESS WIRE)-- #AFHS--The Institute for Healthcare Improvement has launched an Age-Friendly System-Wide Spread Collaborative, engaging 30 health systems across the US.

IHI Launches First Collaborative to Accelerate System-Wide Spread of Age-Friendly Care for Older Adults

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iShares U.S. Medical Devices ETF has demonstrated the greatest long-term performance among peer funds and is uniquely postured for growth looking forward given its mix of top holdings. Abbott Laboratories has made strong advances in heart monitoring with the Abbott Assert-IQ while Intuitive Surgical just received FDA approval for the da Vinci 5, a surgical robotics system. Downsides for IHI compared to peer healthcare and medical device ETFs are its relatively high expense ratio, high valuation, and moderate volatility.

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It appears that the performance of iShares U.S. Medical Devices ETF isn't taking into account any expectations of long-term rates in bond markets. Long-term rates have an outsized impact on stocks whose value resides in the horizon. IHI is extremely high multiple, even relative to the tech-led US equity markets. Valuations do not acknowledge market expectations about LT rates, which are well-founded.

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The top 10 companies of IHI account for a large majority of 71% of its total holdings and have a slightly stronger outlook this year supported by stronger average management guidance. The top IHI companies exhibited strong performance in the healthcare equipment market with the majority or 7 of the top 10 companies gaining share in 2022.

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News for iShares U.S. Medical Devices ETF ETF (IHI)