Its one-year return of 21.7 percent outpaces the 15 percent one-year return on the Health Care Select Sector SPDR Fund (XLV), a broad-based fund that’s the largest healthcare sector ETF with assets of more than $19 billion. On a 10-year basis, IHI’s average return of 19.5 percent tops the XLV fund’s annualized return of 16 percent during that period.

For context, the SPDR S&P 500 (SPY) is up 6.2 percent on a one-year basis and 14 percent on an annualized 10-year basis.

The top three holdings in IHI are Medtronic at 9.8 percent, Abbott Laboratories at 9.7 percent and Thermo Fisher Scientific at 8.1 percent.

XHE is an equal-weight fund with 61 percent of its portfolio devoted to medical equipment, supplies and distribution; 28 percent invests in advanced medical equipment and technology; and 3 percent in pharmaceuticals. Because of its equal-weighting, the fund’s style leans more toward small- to mid-cap companies, versus the mid- to large-cap tilt of IHI.

XHE tracks the S&P Healthcare Equipment Select Industry Index, has 72 holdings and $681 million in assets under management. The expense ratio is 35 basis points.

XHE’s one-year return is 17 percent. Its average five-year return is 17.7 percent (it doesn't have a 10-year track record). During that period, the annualized return on the broad-based healthcare XLV fund is 13 percent and on SPY it’s 10.8 percent.

Its top three holdings are Hologic at 2 percent, and Varian Medical Systems and Edwards Lifesciences, both at 1.9 percent.

A recent Morgan Stanley research report highlighted the rich valuations of the medical technology sector, noting that large-cap medical device makers trade at a 16 percent premium to the S&P, the highest relative valuation in years.

The report also says continued dollar strength and tariffs could be headwinds for margins and earnings per share. On the flip side, the overall defensive nature of the medical device sector offers some protection against broader healthcare headwinds such as drug pricing and Amazon.com.

Amazon has signaled its intent to play a role in mail order and retail pharmacy, and it moved further in that direction with its purchase of online pharmacy PillPack earlier this year. It could also get into telemedicine via Echo and Alex, and maybe become a medical supplier to hospitals.