Which Healthcare ETF Is Best for the Long Term: State Street’s XPH or Invesco’s PBE?

The State Street SPDR S&P Pharmaceuticals ETF (NYSEMKT:XPH) offers broader exposure and lower expenses, while the Invesco Biotechnology & Genome ETF (NYSEMKT:PBE) provides a concentrated, higher-yielding strategy focused on biotech momentum.

Investors seeking healthcare exposure may choose between specialized niches. This comparison looks at how the broader pharmaceutical focus of XPH contrasts with the factor-based biotechnology approach of PBE. While both target healthcare innovators, their portfolio construction and cost structures result in different risk profiles for investors.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

State Street SPDR S&P Pharmaceuticals ETF is the more affordable choice, with an expense ratio of 0.35% compared to 0.59% for Invesco Biotechnology & Genome ETF. However, the Invesco fund offers a substantially higher dividend yield for income-seeking investors.

Performance & risk comparison

What's inside

State Street SPDR S&P Pharmaceuticals ETF focuses on the U.S. pharmaceutical industry, holding 61 stocks across various market capitalizations. Its largest positions include Xeris Biopharma Holdings (NASDAQ:XERS) at 4.12%, Veradermics (NYSE:MANE) at 2.99%, and Septerna (NASDAQ:SEPN) at 2.59%. It was launched in 2006. State Street SPDR S&P Pharmaceuticals ETF has paid $0.27 per share over the trailing 12 months, which on its recent ~$67.93 share price works out to a 0.4% yield.

Invesco Biotechnology & Genome ETF provides a more concentrated portfolio of 31 holdings within the biotech and genomics sectors. It tracks the Dynamic Biotech & Genome Intellidex Index, which selects companies based on momentum, growth, and valuation factors. Top holdings include Gilead Sciences (NASDAQ:GILD) at 5.69%, Biogen (NASDAQ:BIIB) at 5.68%, and Royalty Pharma (NASDAQ:RPRX) at 5.54%. It was launched in 2005. Invesco Biotechnology & Genome ETF has paid $1.33 per share over the trailing 12 months, which on its recent ~$99.62 share price works out to a 1.3% yield.

For more guidance on ETF investing, check out the full guide at this link.

Which looks like the better buy

I'd go with XPH, because biotech's big story right now is acquisitions, and XPH is built to benefit. Drugmakers like AbbVie, Merck, and Eli Lilly are racing to buy smaller biotech companies as patents on their own best-sellers run out. Biotech buyouts have piled up in 2026, and buyers have paid far above market prices to land the companies they want.

XPH is a pharmaceuticals fund, not a pure biotech fund, but many of its smaller holdings act like biotechs. It gives them the same weight as the big names, so a buyout can matter. With roughly 60 holdings, no single deal or trial failure can sink the fund, and it costs far less than PBE.

PBE is the pure biotech choice and pays a higher yield, but its 30 momentum-picked stocks can hurt if the rally cools. Smaller drug developers are risky, since one trial result can swing a stock, and some of XPH's holdings fit that description. Still, for most long-term investors, XPH's broad lineup and lower cost make it the easier fund to hold.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Eli Lilly, Gilead Sciences, and Merck. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.