BBH vs. XPH: Which Healthcare ETF Is Better for Beginners?
Key Points
State Street SPDR S&P Pharmaceuticals ETF provides exposure to 65 companies compared to the 25 holdings in VanEck Biotech ETF.
VanEck Biotech ETF has experienced a deeper maximum drawdown of almost 40% over the last five years.
Both funds carry an identical expense ratio of 0.35% despite significantly different total returns over the trailing 12 months.
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The State Street SPDR S&P Pharmaceuticals ETF (NYSEMKT:XPH) offers broader exposure and lower historical volatility than the VanEck Biotech ETF (NASDAQ:BBH), which relies on a smaller group of biotechnology leaders.
While both funds offer targeted exposure to the healthcare sector, they differ significantly in their concentration and specific industry focus. BBH tracks a top-heavy index of 25 industry leaders, whereas XPH uses a broader sampling of 65 holdings across the pharmaceutical development and manufacturing spectrum.
Snapshot (cost & size)
| Metric | BBH | XPH |
|---|---|---|
| Issuer | VanEck | SPDR |
| Share price | $203.24 (as of 6/30/26) | $66.27 (as of 6/30/26) |
| Expense ratio | 0.35% | 0.35% |
| 1-yr return (as of 6/30/26) | 33.30% | 64.30% |
| Dividend yield | 0.50% | 0.50% |
| Beta | 0.58 | 0.79 |
| AUM | $409.2 million | $440.4 million |
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.
The cost is identical for these two healthcare options, as both have an annual expense ratio of 0.35%. This means investors pay $3.50 for every $1,000 invested. While both offer a 0.50% yield, the total returns have diverged significantly over the past year.
Performance & risk comparison
| Metric | BBH | XPH |
|---|---|---|
| Max drawdown (5 yr) | (39.86%) | (34.99%) |
| Growth of $1,000 over 5 years (total return) | $1,032 | $1,364 |
What's inside
State Street SPDR S&P Pharmaceuticals ETF allocates 100% to healthcare, specifically pharmaceuticals and life sciences. Its largest positions include Definium Therapeutics at 2.88%, MBX Biosciences at 2.81%, and Alumis at 2.05%. The fund was launched in 2006 and holds 65 securities. State Street SPDR S&P Pharmaceuticals ETF has paid $0.34 per share over the trailing 12 months, which on its recent ~$66.27 share price works out to a 0.50% yield.
VanEck Biotech ETF also provides 100% healthcare exposure, but focuses on a concentrated group of 25 biotechnology companies. Its largest positions include Amgen at 15%, Gilead Sciences at 12.7%, and Vertex Pharmaceuticals at 9.4%. This concentration makes it more sensitive to the performance of industry giants. The fund was launched in 2011. VanEck Biotech ETF has paid $0.96 per share over the trailing 12 months, which on its recent ~$203.24 share price works out to a 0.50% yield.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Beginning investors who are looking to build a diversified and stable portfolio may want to consider adding exposure to healthcare stocks. This market sector offers a balance of long-term growth and economically insensitive demand, as medical needs are not driven by economic or market conditions.
BBH and XPH focus on different segments of the healthcare sector. Both charge identical fees and have recently delivered similar dividend yields for investors. Their market caps are also similar, suggesting about equal liquidity between the two funds. XPH’s larger total holdings might be appealing for investors looking to maximize diversity, especially in a dynamic field like pharmaceuticals, where development costs are high and trial processes are lengthy. The fund is also equal-cap-weighted across small-, mid-, and large-cap pharmaceutical stocks, which gives you equal access to upstarts with big growth potential as well as industry giants that pay dividends. So in addition to the top holdings listed above, you’ll also own pieces of Pfizer, Johnson & Johnson, Eli Lilly, and Merck.
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Sarah Sidlow has positions in Johnson & Johnson and Pfizer. The Motley Fool has positions in and recommends Amgen, Eli Lilly, Gilead Sciences, Merck, Pfizer, and Vertex Pharmaceuticals. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
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