Better Health Care ETF: Fidelity's FHLC vs. State Street's XLV

Robert Izquierdo, The Motley Fool

Sun, May 24, 2026 astatine 5:39 PM CDT 5 min read

Investors choosing betwixt the Fidelity MSCI Health Care Index ETF (NYSEMKT:FHLC) and State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) whitethorn find that the erstwhile provides broader market-cap vulnerability portion the second offers superior liquidity and a higher trailing-12-month dividend yield.

Both funds people the home healthcare sector, providing vulnerability to pharmaceuticals, biotechnology, and instrumentality providers. While FHLC covers a wider scope of institution sizes including mid- and small-cap stocks, XLV focuses strictly connected the healthcare components of the S&P 500.

This prime betwixt broad-market diversification and blue-chip attraction is simply a cardinal information for investors looking to summation targeted assemblage exposure.

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.

Both funds are highly cost-efficient with matched 0.08% disbursal ratios. However, the State Street money offers a somewhat higher payout for income seekers, with a trailing-12-month dividend output of 1.7% compared to 1.4% for the Fidelity fund. This quality successful output whitethorn entreaty to those prioritizing existent income implicit somewhat higher caller growth.

Performance & hazard examination

What's wrong

The State Street Health Care Select Sector SPDR ETF provides concentrated vulnerability to 60 large-cap healthcare stocks. Its largest positions see Eli Lilly & Co (NYSE:LLY) astatine 15.18%, Johnson & Johnson (NYSE:JNJ) astatine 10.42%, and AbbVie (NYSE:ABBV) astatine 7.09%. Launched successful 1998, it provides 100% allocation to the healthcare assemblage and has paid $2.51 per stock implicit the trailing 12 months. This money focuses exclusively connected established, high-liquidity companies recovered wrong the benchmark S&P 500 Index.

The Fidelity MSCI Health Care Index ETF employs a overmuch broader strategy with 365 holdings. Its apical positions see Eli Lilly & Co astatine 13.16%, Johnson & Johnson astatine 8.90%, and AbbVie astatine 6.06%. Launched successful 2013, the money has a trailing-12-month dividend of $1.01 per share. By tracking the MSCI USA IMI Health Care Index, it captures small- and mid-cap companies that its rival skips, though it remains wholly invested successful healthcare assemblage equities.