Is State Street SPDR S&P Pharmaceuticals ETF (XPH) a Strong ETF Right Now?

A smart beta exchange traded fund, the State Street SPDR S&P Pharmaceuticals ETF (XPH) debuted on 06/19/2006, and offers broad exposure to the Health Care ETFs category of the market.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexThe fund is sponsored by State Street Investment Management. It has amassed assets over $211.21 million, making it one of the average sized ETFs in the Health Care ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Pharmaceuticals Select Industry Index.The S&P Pharmaceuticals Select Industry Index represents the pharmaceuticals sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Pharmaceuticals Index is a modified equal weight index.Cost & Other ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.The fund has a 12-month trailing dividend yield of 0.92%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.Representing 99.9% of the portfolio, the fund has heaviest allocation to the Healthcare sector.When you look at individual holdings, Crinetics Pharmaceuticals In (CRNX) accounts for about 3.31% of the fund's total assets, followed by Tarsus Pharmaceuticals Inc (TARS) and Corcept Therapeutics Inc (CORT).XPH's top 10 holdings account for about 29.03% of its total assets under management.Performance and RiskYear-to-date, the State Street SPDR S&P Pharmaceuticals ETF has added about 28.24% so far, and is up about 20.74% over the last 12 months (as of 11/27/2025). XPH has traded between $36.65 $54.78 in this past 52-week period. XPH has a beta of 0.61 and standard deviation of 18.96% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 53 holdings, it effectively diversifies company-specific risk .AlternativesState Street SPDR S&P Pharmaceuticals ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.iShares U.S. Pharmaceuticals ETF (IHE) tracks Dow Jones U.S. Select Pharmaceuticals Index and the VanEck Pharmaceutical ETF (PPH) tracks MVIS US Listed Pharmaceutical 25 Index. iShares U.S. Pharmaceuticals ETF has $723.74 million in assets, VanEck Pharmaceutical ETF has $1.2 billion. IHE has an expense ratio of 0.38% and PPH changes 0.36%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFsBottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street SPDR S&P Pharmaceuticals ETF (XPH): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks