State Street vs. First Trust: Is a Broad Healthcare or Biotech Focus Better for Your Portfolio?

Erin Kennedy, The Motley Fool

Wed, July 29, 2026 astatine 8:20 AM CDT 4 min read

Determining whether State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) oregon First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) fits a portfolio depends connected an investor's penchant for broad-sector stableness oregon concentrated biotechnology exposure.

Both funds people the healthcare abstraction but with precise antithetic scopes. XLV tracks the full healthcare assemblage wrong the S&P 500, including giants successful pharmaceuticals and aesculapian devices. FBT focuses strictly connected biotechnology companies, offering a narrower and historically much volatile way into aesculapian innovation.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from monthly returns implicit the disposable money past (up to 5 years). The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

XLV is the much affordable option, charging conscionable 0.08% annually. FBT's disbursal ratio of 0.55% is importantly higher. These costs bespeak the quality betwixt a wide marketplace scale and a specialized, industry-specific strategy.

Performance & hazard examination

The SPDR money provides focused vulnerability to the broader healthcare manufacture wrong the S&P 500, covering sectors specified arsenic pharmaceuticals and wellness technology. Its largest positions see Eli Lilly (NYSE:LLY) astatine 16.13%, Johnson & Johnson (NYSE:JNJ) astatine 10.81%, and AbbVie astatine 7.81%. The money has 60 holdings successful total. It was launched successful 1998. This conveyance allows investors to marque targeted, strategical allocations much precisely than accepted style-based concern options.

The First Trust ETF is 100% concentrated successful the healthcare sector, specifically the biotechnology subsector. Its portfolio consists of 30 holdings and mirrors the terms movements of the NYSE Arca Biotechnology Index. Its apical holdings see BeOne Medicines (NASDAQ:ONC) astatine 3.66%, Halozyme Therapeutics (NASDAQ:HALO) astatine 3.61%, and Amgen (NASDAQ:AMGN) astatine 3.48%. The money was launched successful 2006. Its halfway nonsubjective is to intimately lucifer its benchmark scale earlier accounting for operating fees and expenses.

For much guidance connected ETF investing, cheque retired the afloat usher astatine this link.