Healthcare Giants or Medical Innovators? XLV and PINK Are Built for Different Investors.
Key Points
The Simplify Health Care ETF has significantly outperformed the State Street Health Care Select Sector SPDR ETF on a 1-year total return basis.
The State Street Health Care Select Sector SPDR ETF maintains significantly larger assets under management and a slightly higher number of holdings.
While the State Street Health Care Select Sector SPDR ETF tracks a passive index of healthcare giants, Simplify Health Care ETF actively targets medical innovation while donating profits to charity.
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The State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) provides low-cost, passive exposure to established healthcare giants, while the Simplify Health Care ETF (NYSEMKT:PINK) offers an active strategy targeting medical breakthroughs.
Investors evaluating the healthcare sector could choose between the stability of established medical giants and the high-growth potential of cutting-edge innovation. While both funds operate within the medical sector, they differ significantly in their investment philosophies. The State Street fund tracks a well-known index, whereas the Simplify fund employs active management led by Michael Taylor, who utilizes over 20 years of experience to navigate the complexities of the biotech and medtech industries.
Snapshot (cost & size)
| Metric | PINK | XLV |
|---|---|---|
| Issuer | Simplify | SPDR |
| Expense ratio | 0.51% | 0.08% |
| 1-yr return (as of June 3, 2026) | 31.30% | 12.90% |
| Dividend yield | 0.70% | 1.70% |
| Beta | 0.74 | 0.58 |
| AUM | ~$265.7 million | ~$37.6 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.
The State Street fund is more affordable than the Simplify fund, carrying an expense ratio of just 0.08% compared to 0.51%. Income seekers may also find the State Street fund more attractive, as its 1.70% trailing-12-month dividend yield sits 1.04 percentage points higher than the Simplify fund yield.
Performance & risk comparison
| Metric | PINK | XLV |
|---|---|---|
| Max drawdown (4 yr) | (18.80%) | (17.10%) |
| Growth of $1,000 over 4 years (total return) | $1,525 | $1,214 |
What's inside
The State Street Health Care Select Sector SPDR ETF provides exposure to 60 holdings within the S&P 500 healthcare sector, spanning pharmaceuticals, health care equipment, and biotechnology. Its portfolio is weighted toward established mega-caps, with top holdings including Eli Lilly (NYSE:LLY) at 15.97%, Johnson & Johnson (NYSE:JNJ) at 10.17%, and AbbVie (NYSE:ABBV) at 7.21%. This fund launched in 1998 and has a trailing-12-month dividend of $2.51 per share. It tracks a passive index and currently reports no unique investment quirks.
The Simplify Health Care ETF is an actively managed fund with 58 positions that launched in 2021. It targets high-growth innovative firms like PureCycle Technologies (NASDAQ:PCT) at 10.88%, United Therapeutics (NASDAQ:UTHR) at 7.26%, and Novo Nordisk (NYSE:NVO) at 6.42%. Its portfolio tilt includes 93% healthcare and 7% industrials, and it has a trailing-12-month dividend of $0.25 per share. The fund utilizes a currency hedge and is the first 100% pro bono ETF, donating its net profits to the Susan G. Komen foundation.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Few sectors offer the same combination of defensive stability and long-term growth potential as healthcare. People will always need medical care, and the industry keeps finding better ways to provide it. The question for investors is whether to own the established industry leaders or bet on the companies pushing the boundaries of what medicine can do.
XLV is built on the premise that the biggest healthcare companies got that way for a reason, and will continue to benefit from scale, pricing power, and the kind of institutional trust that takes decades to build. PINK is betting on a future in which gene therapy, precision medicine, and biotech innovation will generate the healthcare sector's most significant returns over the next decade. The added social mission woven into PINK's design is unusual in the ETF world and worth noting for investors who care where their dollars go beyond the portfolio.
PINK delivered dramatically stronger returns over the past year, but charges more than six times what XLV does. XLV's predictability, massive scale, and rock-bottom cost make it the stronger default for long-term investors. PINK is a more interesting option for those with high conviction in breakthrough medicine and who are comfortable paying for active management with a social mission attached.
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Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Eli Lilly, and United Therapeutics. The Motley Fool recommends Johnson & Johnson and Novo Nordisk. The Motley Fool has a disclosure policy.
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