XLV ETF Explained: Returns, Expense Ratio, Holdings, and Alternative ETFs
The Health Care Select Sector SPDR ETF (XLV) combines a low expense ratio with ample liquidity, making it a core holding for diversified exposure to the US health care sector. It covers pharmaceuticals, biotech, and medical devices broadly and pays quarterly dividends, which suits investors seeking defensive sector exposure.
SubscribeWhat Is the Health Care Select Sector SPDR ETF?
This sector ETF tracks the Health Care Select Sector Index, which is made up of the health care stocks in the S&P 500. It holds pharmaceutical, biotech, medical device, health care services, and life sciences companies on a broad, market-cap-weighted basis.
It suits investors who want diversified exposure to the US health care sector, or who want to add a defensive sector to a sector rotation strategy.
The ETF is managed passively (index tracking) by State Street.
How Do You Invest in the Health Care Select Sector SPDR ETF?
| Item | Details |
|---|---|
| Underlying Index | Health Care Select Sector Index |
| Management Style | Passive (index tracking) |
| Rebalancing Frequency | Quarterly |
| Dividend Frequency | Quarterly |
| Issuer | State Street |
| Expense Ratio | 0.08% |
The fund replicates the index by holding its constituents at their market-cap weights, tracking the performance of the US health care sector as a whole. It spreads single-stock risk by holding several sub-industries together, including pharmaceuticals, biotech, medical devices, and health care services, and rebalancing is reflected on a quarterly basis.
- Management fee that is low relative to the category average
- Ample trading liquidity and an active options market
Health Care Select Sector SPDR ETF Size and Costs (AUM and Expense Ratio)
Assets under management (AUM) stand at $47.5B, and the expense ratio is 0.08% per year.
Compared with similar ETFs in the same health care category, it offers a lower fee and superior trading liquidity.
Health Care Select Sector SPDR ETF Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeBecause of its defensive nature, the health care sector tends to hold up relatively well during periods of market volatility, although drug pricing policy and regulatory issues can sometimes increase volatility. Short-term trends are influenced by earnings seasons and the policy environment.
Capital inflows into the health care sector have been fairly steady, supported by defensive demand and expectations of structural growth from aging populations. When market uncertainty rises, money also tends to flow into the sector as a defensive play.
Health Care Select Sector SPDR ETF Pros and Cons
Its strengths are a low fee, ample liquidity, and defensive sector characteristics, while its drawbacks are concentration in a single sector and exposure to policy risk.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products to the Health Care Select Sector SPDR ETF
VHT, FHLC, and IYH, shown in the table, are similar ETFs with broad exposure to the same US health care sector, differing in fees, issuer, and underlying index. XBI is a variant focused on biotech, and IHI is an ETF focused on medical devices. Within the same health care sector, investors who want a heavier tilt toward pharmaceuticals can consider PPH, and those who want larger exposure can also look at the leveraged products RXL and CURE.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 VHT | Vanguard Health Care ETF | $332.24 | -0.4% | $20.0B | 0.09% | 1.39% | +22.6% |
 XBI | State Street SPDR S&P Biotech ETF | $152.78 | -0.3% | $10.4B | 0.35% | 0.36% | +39.5% |
 IYH | iShares U.S. Healthcare ETF | $75.22 | -0.4% | $4.5B | 0.37% | 1.06% | +23.0% |
 FHLC | Fidelity MSCI Health Care Index ETF | $85.91 | -0.5% | $3.8B | 0.08% | 1.18% | +23.1% |
 IHI | iShares U.S. Medical Devices ETF | $53.42 | -1.6% | $3.5B | 0.37% | 0.49% | -11.7% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| LLY | Lilly(Eli) & Co | 0.30% | $1270.75 | -1.0% | $1.20T | 43.2 | 0.54% |
| JNJ | Johnson & Johnson | 0.22% | $257.78 | -0.6% | $621.2B | 39.1 | 2.07% |
| ABBV | Abbvie Inc | 0.15% | $284.80 | -1.5% | $503.3B | 80.5 | 2.41% |
| UNH | Unitedhealth Group Inc | 0.11% | $417.00 | -0.5% | $374.3B | 23.8 | 2.16% |
| MRK | Merck & Co Inc | 0.11% | $149.88 | +1.1% | $369.8B | 119.8 | 2.27% |
Health Care Select Sector SPDR ETF Investor Checkpoints
Here are the points to review before investing in XLV. It is highly useful as a defensive core sector holding, but because it is concentrated in a single sector, it is wise to check in advance the sector concentration, drug pricing and health care policy risk, and top holdings concentration.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense Ratio | Check the cumulative cost impact of long-term holding | Low |
| 💧 Liquidity | Review trading volume and bid-ask spreads | Top tier |
| 📊 Top Holdings Concentration | Track the weight of large pharmaceutical and insurance companies | Heavy weighting |
| ⚖️ Policy Risk | Check the drug pricing and health care policy environment | Needs monitoring |
Single-sector concentration and changes in drug pricing and regulatory policy are the main drivers of short-term volatility. If the health care industry weakens, volatility can exceed that of the overall market, so position sizing within the portfolio needs to be managed.
For investors who want diversified exposure to the US health care sector, it is a standard choice with a low fee and ample liquidity. To focus on biotech or medical devices, it is appropriate to also consider narrower thematic ETFs such as XBI and IHI.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of June 21, 2026.
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