State Street's Health Care ETF Tops Invesco's on Yield and Returns

Sarah Sidlow, The Motley Fool

Tue, June 2, 2026 astatine 6:30 AM CDT 4 min read

Both the State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) and the Invesco S&P 500 Equal Weight Health Care ETF (NYSEMKT:RSPH) absorption connected the healthcare assemblage of the S&P 500, yet their interior mechanics make chiseled concern profiles.

Investors choosing betwixt them indispensable determine if they similar XLV’s stableness and the momentum of the industry's largest players oregon RSPH’s broader, diversified vulnerability that comes with adjacent weighting crossed the full sector.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

Cost is simply a superior differentiator here, arsenic the State Street money is importantly much affordable with an disbursal ratio of 0.08%. This little interest structure, combined with a higher dividend output of 1.7%, whitethorn entreaty to income-focused investors looking for businesslike compounding done the sector.

Performance & hazard examination

While some funds people the aforesaid conception of the market, their hazard metrics person historically diverged. The State Street money has shown much resilience with a little maximum drawdown, and its full maturation implicit 5 years has outpaced the Invesco money by a important margin.

What's wrong

State Street Health Care Select Sector SPDR ETF allocates 100% of its portfolio to the healthcare sector, tracking a market-cap-weighted index. This strategy results successful important attraction astatine the top; its largest positions see Eli Lilly & Co. astatine 16%, Johnson & Johnson astatine 10%, and AbbVie astatine 7%. Launched successful 1998, the money holds 60 stocks and has a trailing-12-month dividend of $2.51 per share. Because it is weighted by size, its show is heavy influenced by the biggest pharmaceutical and biotech names successful the market.

In contrast, Invesco S&P 500 Equal Weight Health Care ETF tracks an equal-weight index, which provides a precise antithetic hazard profile. Although it besides holds astir 60 stocks, it allocates astir adjacent superior to each, meaning smaller companies person arsenic overmuch interaction arsenic the giants. Its apical holdings see Humana astatine 3%, Centene astatine 2.8%, and Elevance Health astatine 2.3%. Launched successful 2006, the money is 98% healthcare with tiny positions successful currency and different assets. It paid $0.22 per stock implicit the trailing 12 months. This attack reduces attraction hazard but whitethorn pb to antithetic volatility patterns during marketplace shifts.