State Street Health Care ETF Tops Invesco Pharma on Cost and Size
Key Points
State Street Health Care Select Sector SPDR ETF offers a significantly lower expense ratio and far greater assets under management than Invesco Pharmaceuticals ETF.
Invesco's ETF focuses exclusively on 29 pharmaceutical companies, whereas the SPDR fund provides broader exposure across the healthcare sector.
The SPDR ETF offers a higher trailing dividend yield, while Invesco's fund has shown stronger total returns over the past year.
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The State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) provides broad, low-cost exposure to the entire healthcare sector, whereas the Invesco Pharmaceuticals ETF (NYSEMKT:PJP) offers a concentrated bet on 29 specific pharmaceutical companies.
Investors seeking healthcare exposure often weigh broad-market efficiency against niche industry concentration. While both funds operate within the healthcare space, they differ significantly in their scope. The SPDR fund tracks a diversified index of large-cap healthcare stocks, while the Invesco fund homes in on the drug manufacturing and research segment.
Snapshot (cost & size)
| Metric | PJP | XLV |
|---|---|---|
| Issuer | Invesco | SPDR |
| Share price (as of June 30, 2026) | $118.45 | $158.66 |
| Expense ratio | 0.57% | 0.08% |
| 1-yr return (as of June 30, 2026) | 49.9% | 19.8% |
| Dividend yield | 0.9% | 1.6% |
| Beta | 0.45 | 0.56 |
| AUM | $353.9 million | $40.9 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Cost is a major differentiator here; the State Street fund is significantly more affordable with an expense ratio of 0.08%. Additionally, it offers a higher payout for income seekers, with a yield gap of 0.70 percentage points over the Invesco ETF.
Performance & risk comparison
| Metric | PJP | XLV |
|---|---|---|
| Max drawdown (5 yr) | (17.5%) | (17.1%) |
| Growth of $1,000 over 5 years (total return) | $1,530 | $1,354 |
What's inside
The SPDR ETF provides exposure across healthcare fields including biotechnology, life sciences, and health technology. Its largest positions include Eli Lilly (NYSE:LLY) at 16.72%, Johnson & Johnson (NYSE:JNJ) at 10.70%, and AbbVie (NYSE:ABBV) at 7.72%. The fund, which holds 59 securities, was launched in 1998. The SPDR ETF has paid $2.53 per share over the trailing 12 months, which on its recent ~$158.66 share price works out to a 1.6% yield.
Invesco’s ETF focuses specifically on 29 U.S. pharmaceutical companies involved in research, development, and distribution. Eli Lilly (5.22%), Abbott Laboratories (NYSE:ABT) (5.16%), and AbbVie (5.14%) are among its largest positions. The fund was launched in 2005. Invesco’s ETF has paid $1.06 per share over the trailing 12 months, which on its recent ~$118.45 share price works out to a 0.9% yield.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Perhaps the greatest difference between these two ETFs is that XLV is literally orders of magnitude larger than PJP in terms of assets under management. That size difference often has knock-on effects. For one, XLV has much higher average trading volume. Additionally, lower average volume for PJP means an increased likelihood of wider bid-ask spreads.
Overall, this seems like a situation where you're paying for your returns (although, as always, it's worth a reminder that past performance is no indication of future results). PJP has a higher expense ratio, but also higher one- and five-year returns. The choice is between PJP's better returns and higher expense ratio, or XLV's massively larger fund with greater liquidity and a bigger dividend yield. The former is probably more appealing to growth investors, while conservative types will likely prefer XLV.
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Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, and Eli Lilly. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
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