XLV: STATE STREET(R) HEALTH CARE SELECT SECTOR SPDR(R) ETF
ETF Education Report: STATE STREET(R) HEALTH CARE SELECT SECTOR SPDR(R) ETF (XLV)
What this ETF is trying to do
The XLV ETF is designed to track the health care sector. Instead of buying just one company, this ETF allows investors to own a small piece of many different health care companies at once. This includes large businesses involved in medicine, medical tools, and health insurance.
What the numbers show
When looking at an ETF, it is important to know the difference between "price return" and "total return."
• Price return only tracks how much the share price changed.
• Total return includes both the price change and any cash payments (distributions) made to investors.
For XLV, the numbers show growth:
• Year-to-Date (YTD): The price return is approximately 7.94%, while the total return is approximately 9.27%.
• One Year: The price return was approximately 15.94%, and the total return was approximately 17.86%.
• Three Years: The price return was approximately 28.52%, and the total return was approximately 35.08%.
To visualize this, the estimated price from roughly one year ago was $144.12. The current price is $167.09.
Top Holdings
This ETF holds many companies. Because the list provided is partial, these are just the largest ones:
• Eli Lilly and Co (15.10%)
• Johnson & Johnson (10.41%)
• AbbVie Inc (7.54%)
• Merck & Co Inc (5.85%)
• UnitedHealth Group Inc (5.38%)
• Thermo Fisher Scientific Inc (4.07%)
• Amgen Inc (3.72%)
• Gilead Sciences Inc (3.01%)
• Abbott Laboratories (2.79%)
• Pfizer Inc (2.65%)
Income and distribution explanation
Some investors look for "distributions," which are cash payments made by the ETF. XLV has a distribution yield of approximately 1.53%. This means the cash payments represent about 1.53% of the ETF's price. These distributions usually happen quarterly, and over the last year, there were 4 payments.
NAV erosion explanation
"NAV erosion" is a term used to describe when the value of an ETF's underlying assets drops significantly over time. It is important to watch for this if you want your investment to stay stable. For XLV, the erosion-risk score is 100, and the label shows "No price erosion detected." There is no severe erosion-risk flag for this ETF.
Pros
• The ETF has shown positive price returns and total returns over the last one, three, and five years.
• It provides exposure to many large, well-known health care companies.
Cons
• The distribution yield is relatively low compared to some other types of income-focused investments.
Beginner takeaway
XLV is an ETF that focuses on the health care sector. It has grown in both share price and total value over several years. While it pays out some cash through distributions, its main movement comes from the changing prices of the health care companies it holds.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | ELI LILLY AND CO | LLY | 15.10% |
| 2 | JOHNSON & JOHNSON | JNJ | 10.41% |
| 3 | ABBVIE INC | ABBV | 7.54% |
| 4 | MERCK & CO INC | MRK | 5.85% |
| 5 | UNITEDHEALTH GROUP INC | UNH | 5.38% |
| 6 | THERMO FISHER SCIENTIFIC INC | TMO | 4.07% |
| 7 | AMGEN INC | AMGN | 3.72% |
| 8 | GILEAD SCIENCES INC | GILD | 3.01% |
| 9 | ABBOTT LABORATORIES | ABT | 2.79% |
| 10 | PFIZER INC | PFE | 2.65% |