Health Care Select Sector SPDR Fund (XLV): Complete Beginner's Guide
Last updated: March 2026 • State Street Global Advisors • Health Care Sector
Expense Ratio
0.09%
AUM
$40.0B
Dividend Yield
1.50%
Inception
1998
Beginner Score
9/10
What is Health Care Select Sector SPDR Fund?
XLV provides targeted exposure to the health care sector of the S&P 500, including pharmaceutical giants, biotech firms, medical device makers, and health insurance companies. Healthcare is considered a defensive sector because people need medical care regardless of the economy. Beginners use XLV to add healthcare exposure, which can provide stability during market downturns while benefiting from long-term demographic trends like an aging population.
XLV is managed by State Street Global Advisors and has been available since 1998. With $40.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.09%, which means for every $10,000 you invest, you pay approximately $9 per year in management fees.
XLV at a Glance — Key Metrics
| Expense Ratio | 0.09% |
| Total Holdings | 64 |
| P/E Ratio | 20.5 |
| Beta | 0.72 |
| Dividend Yield | 1.50% |
| AUM | $40.0B |
| Inception Year | 1998 |
| Issuer | State Street Global Advisors |
Top 10 Holdings in XLV
XLV holds 64 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | UnitedHealth Group Inc. | UNH | 10.50% |
| 2 | Eli Lilly and Co. | LLY | 9.80% |
| 3 | Johnson & Johnson | JNJ | 7.20% |
| 4 | AbbVie Inc. | ABBV | 6.50% |
| 5 | Merck & Co. Inc. | MRK | 5.50% |
| 6 | Thermo Fisher Scientific | TMO | 4.80% |
| 7 | Abbott Laboratories | ABT | 4.20% |
| 8 | Amgen Inc. | AMGN | 3.80% |
| 9 | Pfizer Inc. | PFE | 3.50% |
| 10 | Intuitive Surgical Inc. | ISRG | 3.20% |
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XLV Performance History
Here's how XLV has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
1.90%
1 Year
12.50%
3 Year
6.80%
5 Year
9.80%
10 Year
10.50%
Beginner Suitability Score: 9/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
XLV scores 9/10 because it has very low fees, shows lower-than-average volatility, focuses on 64 selected holdings, and has been available since 1998, giving it a proven track record.
How to Buy XLV — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "XLV" — Use the search bar in your brokerage platform to find Health Care Select Sector SPDR Fund.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
Dollar Cost Averaging Into XLV
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With XLV's expense ratio of 0.09%, a $10,000 investment would lose approximately $771 to fees over 20 years compared to a zero-fee investment. This is a reasonable fee level for the value provided.
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Pros and Cons of XLV
Pros
- ✓Healthcare is a defensive sector that holds up relatively well during recessions and bear markets
- ✓Benefits from powerful long-term demographic trends including aging populations worldwide
- ✓Low beta of 0.72 means less volatility than the broad market, providing smoother returns
- ✓Low 0.09% expense ratio provides cheap access to the full S&P 500 healthcare sector
Cons
- ✗Regulatory and political risk from potential drug pricing reforms or healthcare policy changes
- ✗Patent expirations on blockbuster drugs can cause sharp declines in individual holdings
- ✗Concentrated in UnitedHealth and Eli Lilly, which together represent over 20% of assets
XLV vs Similar ETFs
See how XLV stacks up against similar funds:
Frequently Asked Questions
Is XLV a good ETF for beginners?▾
XLV has a Beginner Suitability Score of 9/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of XLV?▾
XLV has an expense ratio of 0.09%. This means for every $10,000 you invest, you pay approximately $9 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in XLV?▾
You can invest in XLV with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does XLV pay dividends?▾
Yes, XLV pays dividends with a current yield of approximately 1.50%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in XLV?▾
The top holdings in XLV include UnitedHealth Group Inc. (10.50%), Eli Lilly and Co. (9.80%), Johnson & Johnson (7.20%), and more. The fund holds 64 total positions, providing focused exposure to selected companies.