XLV vs VHT: The Two Best Healthcare ETFs — Large-Cap Only vs Broader Market
XLV holds only S&P 500 healthcare companies — the large-cap giants. VHT adds mid and small healthcare companies for more complete sector exposure. Both are excellent, low-cost options.
XLV (Health Care Select Sector SPDR) and VHT (Vanguard Health Care ETF) are the two dominant low-cost US healthcare ETFs. XLV tracks the S&P 500 healthcare sector — only the 64 largest US healthcare companies. VHT tracks the broader MSCI US Investable Market Health Care Index with ~430 companies including mid and small-cap healthcare. Both are cheap: XLV at 0.09%, VHT at 0.10%. Top holdings are nearly identical — UnitedHealth, Eli Lilly, Johnson & Johnson, AbbVie, Merck dominate both. VHT's edge is broader diversification including mid-cap biotech and specialty pharmaceutical companies not in the S&P 500. XLV's edge is slightly more liquidity and options market depth. For long-term investors, VHT's additional breadth at essentially the same cost makes it the slight favorite.
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
📋 XLV vs VHT — Key Facts Side by Side
| Metric | XLV | VHT |
|---|---|---|
| Fund Name | State Street Health Care Select Sector SPDR ETF | Vanguard Health Care Index Fund ETF Shares |
| Issuer | State Street | Vanguard |
| Tracks Index | Health Care Select Sector Index | MSCI US IMI Health Care 25/50 |
| Expense Ratio | 0.09% ✓ | 0.10% |
| Cost per $10K/yr | $9.00 | $10.00 |
| AUM | $40.6B | $20.4B |
| Holdings | 64 | 430 |
| Inception | 1998 | 2004 |
| 1-Year Return | +19.11% | +21.72% |
| 3-Year Return | +9.74% | +9.72% |
| 5-Year Return | +6.44% | +5.40% |
| Dividend Yield | 1.60% | 1.58% |
| Holdings Overlap | See holdings overlap → | |
| Avg Bid-Ask Spread | 0.00% | 0.01% |
Expense ratio, AUM, and returns updated Jul 14, 2026 from ETF BFF database. Returns are annualised. Not investment advice.
📊 XLV vs VHT — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Which Fund Fits Which Investor?
- want the lowest fees: saves ~$1/yr per $10K vs VHT
- already use State Street and prefer staying within one fund family
- want broader diversification (430 holdings vs 64)
- already use Vanguard and prefer staying within one fund family
💰 What the Fee Difference Actually Costs
Adjust the numbers for your situation. This models each fund's expense ratio compounding against your balance over time.
Assumes a constant annual return reinvested, with each fund's expense ratio deducted yearly. Illustrative only; actual returns vary. Past performance does not guarantee future results.
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❓ XLV vs VHT — Frequently Asked Questions
New to ETF investing? See answers to the most common ETF questions →