Health Care Select Sector SPDR Fund (XLV): Complete Beginner's Guide
Health Care Select Sector SPDR Fund (XLV) is a health care sector ETF from State Street Global Advisors with an expense ratio of 0.09% and $40.0B in assets under management. Our Beginner Suitability Score: 9/10 (Great for Beginners). 5-year annualized return: 9.80%.
Last updated: April 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% |
XLV's top holding is UnitedHealth Group Inc. (UNH) at 10.50%, followed by Eli Lilly and Co. (LLY) at 9.80% and Johnson & Johnson (JNJ) at 7.20%. The top 10 holdings account for 59.00% of the fund's 64 total positions.
View data table
| Rank | 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% |
Want the full framework? This 2-hour ETF course teaches you exactly how to pick, buy, and hold profitable ETFs — from zero to confident investor. Under $15.
Ready to invest? Open an IBKR account in 10 minutes and get free stock. $0 commissions on US ETFs • Fractional shares from $1 • 150+ global markets.
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%
XLV has returned 9.80% annualized over 5 years and 10.50% over 10 years. YTD return is 1.90%.
View data table
| Period | Return |
|---|---|
| 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.
XLV Sector Allocation
Here's how XLV distributes its investments across different sectors of the economy:
XLV's largest sector allocation is Pharmaceuticals at 31.8%, followed by Health Care Equipment at 20.5% and Managed Health Care at 17.2%.
View data table
| Sector | Weight |
|---|---|
| Pharmaceuticals | 31.8% |
| Health Care Equipment | 20.5% |
| Managed Health Care | 17.2% |
| Biotechnology | 14.8% |
| Life Sciences Tools | 6.8% |
| Health Care Services | 4.2% |
| Health Care Facilities | 2.8% |
| Health Care Technology | 1.9% |
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.
XLV's expense ratio of 0.09% costs $771 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $45,839.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,632 | $61 |
| 10 | $21,589 | $21,410 | $179 |
| 15 | $31,722 | $31,327 | $395 |
| 20 | $46,610 | $45,839 | $771 |
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.
What sectors does XLV invest in?▾
XLV's largest sector allocations are Pharmaceuticals (31.80%), Health Care Equipment (20.50%), Managed Health Care (17.20%). This sector distribution shows a focus on pharmaceuticals stocks.
How much do XLV's fees cost over time?▾
With an expense ratio of 0.09%, a $10,000 investment in XLV would lose approximately $771 to fees over 20 years (assuming 8% annual returns). This is a reasonable fee level.