Capturing the U.S. Health Care Space with XLV

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Health care has been and always will be in the big investment picture. Whether it be Covid or a change in health insurance laws, this sector is always an in-demand industry.

The Health Care Select Sector SPDR Fund (XLV) offers an investment vehicle to gain exposure to this space in a cost-effective* manner and should be a consideration for diversified portfolios.

XLV tracks health care stocks from within the S&P 500 Index, weighted by market cap. This Exchange Traded Fund (ETF) offers broad exposure to core companies in the U.S. health care industry. The top 10 holdings compose more than 50% of the fund**, with UnitedHealth Group (9.8%) and Johnson & Johnson (9.1%) being the biggest holdings.

Lilly (5.7%), Pfizer (5.7%), AbbVie (5.6%), and Merck (5.5%) all represent more than 5% of the ETF’s total holdings. Within the health care industry, the ETF is weighted more to pharmaceuticals than health services.

XLV has been trading for more than 20 years. Investors use it widely for strategic or tactical positions. With more than $40 billion** in assets under management and a low total expense ratio of 0.10%*, XLV offers easy access to the top names in the industry, including pharmaceuticals, health care equipment and supplies, health care providers and services, biotechnology, life sciences tools and services, and health care technology industries.

Health Care Demand Doesn’t Wane

The health care industry is one of the largest in the U.S. economy. Demand for the industry is always there.  

Since XLV is both cap-weighted and draws its constituents only from the S&P 500, it tilts heavily toward large cap companies. For focused exposure to leading health care names, XLV is tough to beat.

The open-ended fund tracks the Health Care Select Sector Index. Transparency is one of the advantages an ETF like XLV offers. You can follow daily portfolio holdings and weightings at sectorspdrs.com.