Should You Invest in the State Street Health Care Select Sector SPDR ETF ETF (XLV)?

Looking for broad exposure to the Healthcare - Broad segment of the equity market? You should consider the State Street Health Care Select Sector SPDR ETF ETF (XLV), a passively managed exchange traded fund launched on December 16, 1998.While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $40.99 billion, making it the largest ETF attempting to match the performance of the Healthcare - Broad segment of the equity market. XLV seeks to match the performance of the Health Care Select Sector Index before fees and expenses.The Health Care Select Sector Index includes companies from the following industries: pharmaceuticals; health care providers & services; health care equipment & supplies; biotechnology; life sciences tools & services; and health care technology.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.It has a 12-month trailing dividend yield of 1.56%.Sector Exposure and Top HoldingsETFs offer a 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.This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.Looking at individual holdings, Eli Lilly + Co (LLY) accounts for about 12.97% of total assets, followed by Johnson + Johnson (JNJ) and Abbvie Inc (ABBV).The top 10 holdings account for about 57.14% of total assets under management.Performance and RiskSo far this year, XLV return is roughly 14.79%, and it's up approximately 12.45% in the last one year (as of 12/16/2025). During this past 52-week period, the fund has traded between $128.77 and $158.77.The ETF has a beta of 0.61 and standard deviation of 13.38% for the trailing three-year period, making it a medium risk choice in the space. With about 63 holdings, it effectively diversifies company-specific risk.AlternativesState Street Health Care Select Sector SPDR ETF ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLV is an outstanding option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.iShares Global Healthcare ETF (IXJ) tracks S&P Global 1200 Healthcare Sector Index and the Vanguard Health Care ETF (VHT) tracks MSCI US Investable Market Health Care 25/50 Index. iShares Global Healthcare ETF has $4.52 billion in assets, Vanguard Health Care ETF has $17.53 billion. IXJ has an expense ratio of 0.4%, and VHT charges 0.09%.Bottom 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 Health Care Select Sector SPDR ETF ETF (XLV): 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