Health Care ETFs: XLV Delivers Low Fees and Solid Returns

Jake Lerch, The Motley Fool

Tue, June 16, 2026 astatine 8:07 AM CDT 5 min read

Choosing betwixt the State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) and the iShares U.S. Healthcare ETF (NYSEMKT:IYH) often comes down to a penchant for little fees versus broader diversification.

Both funds supply concentrated vulnerability to the U.S. healthcare market, encompassing pharmaceutical giants and aesculapian exertion companies. While they stock apical holdings similar Eli Lilly and Co. (NYSE:LLY), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV), differences successful outgo and market-cap attraction could importantly interaction semipermanent results.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The State Street Health Care Select Sector SPDR ETF is notably much affordable, with an disbursal ratio of 0.08% compared to the 0.38% charged by the iShares U.S. Healthcare ETF. For income-focused investors, XLV besides offers a higher payout, providing much output per dollar invested than IYH.

Performance & hazard examination

What's wrong

The State Street Health Care Select Sector SPDR ETF (XLV) provides vulnerability to 60 healthcare companies specifically selected from the S&P 500. Its largest positions see Eli Lilly and Co.  astatine 16.52%, Johnson & Johnson astatine 10.15%, and AbbVie Inc. astatine 7.15%. Launched successful 1998, it has paid $2.51 per stock implicit the trailing 12 months. Its portfolio is 100% weighted toward the healthcare assemblage and excludes smaller companies not recovered successful the large-cap benchmark.

The iShares U.S. Healthcare ETF (IYH) holds a larger handbasket of 102 stocks, which whitethorn entreaty to those seeking vulnerability to mid-cap companies alongside large-cap leaders. Its largest positions see Eli Lilly and Co. astatine 16.17%, Johnson & Johnson astatine 9.81%, and AbbVie Inc. astatine 6.94%. Launched successful 2000, it has a trailing-12-month dividend of $0.81 per share. Like its counterpart, it maintains 100% vulnerability to the healthcare assemblage but offers somewhat broader diversification crossed marketplace capitalizations.

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