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.
By capturing the health care market in a broad way, the ups and down of a particular big name in the sector is mitigated by the exposure to other companies.
Where Does Health Care Fit in a Portfolio?
Sector investing has been made easy through the advent of the exchange-traded fund, and the lineup of SPDR Sector ETFs has been leading the way for easy and cost-efficient* exposure.
Health care is a daily expenditure for individuals and companies. The Health Care Select Sector SPDR Fund (XLV) allows easy access to the biggest companies in the industry in a diversified methodology that can fit portfolios and investment strategies in a broad market manner.
DISCLAIMER: This is a work of research and should not be taken as investment or financial advice. Therefore, Select Sector SPDRs or the publisher is not liable for any decision made based on the publication.
About the Company:
Select Sector SPDR ETFs offer flexibility and customization opportunities. Many investors have similar outlooks, but no two are exactly alike. Select Sector SPDR ETFs let investors select the sectors that best meet their investment goals.
*Ordinary brokerage fees apply
**Holdings, Weightings & Assets as 12/31/22 subject to change
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. The S&P 500 Index figures do not reflect any fees, expenses or taxes. An investor should consider investment objectives, risks, fees and expenses before investing.
One may not invest directly in an index.
Transparent ETFs provide daily disclosure of portfolio holdings and weightings.
All ETFs are subject to risk, including loss of principal. Sector ETF products are also subject to sector risk and nondiversification risk, which generally will result in greater price fluctuations than the overall market.
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-SECTOR-ETF (732-8673) or visit www.sectorspdrs.com. Read the prospectus carefully before investing.
ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is distributor for the Select Sector SPDR Trust.
*Dan Dolan is a Registered Representative of ALPS Portfolio Solutions Distributor, Inc. ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is the distributor for the Select Sector SPDR Trust.
SEL006291 EXP 12/31/23
Company Name: Select Sector SPDRs
Contact Person: Dan Dolan
Email: Send Email
Address:1290 Broadway, Suite 1000
Country: United States