The Fidelity MSCI Health Care Index ETF offers a significantly lower expense ratio and a more diversified portfolio than the State Street SPDR S&P Biotech ETF.
The State Street SPDR S&P Biotech ETF experienced a much deeper maximum drawdown over the last five years but outperformed on a 1-year total return basis.
The Fidelity MSCI Health Care Index ETF concentrates on large-cap pharmaceutical giants while the State Street S&P Biotech ETF targets specialized biotechnology companies.
The Fidelity MSCI Health Care Index ETF (NYSEMKT:FHLC) provides broad, low-cost exposure to the entire healthcare sector, whereas the State Street SPDR S&P Biotech ETF (NYSEMKT:XBI) offers a narrower, more volatile focus on biotechnology.
Both funds target the healthcare space but with different strategies. The Fidelity fund uses a market-cap-weighted approach across the broad industry, while the State Street fund utilizes an equal-weighted index to capture the potential growth of smaller biotechnology companies.
| Metric | XBI | FHLC |
|---|---|---|
| Issuer | State Street | Fidelity |
| Share price | $156.61 (as of 2026-09-28) | $82.92 (as of 2026-09-28) |
| Expense ratio | 0.35% | 0.08% |
| 1-yr return (as of 2026-09-28) | 81.5% | 27.8% |
| Dividend yield | 0.3% | 1.2% |
| Beta | 1.12 | 0.58 |
| AUM | $11.2 billion | $3.5 billion |
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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Fidelity fund is significantly more affordable with an expense ratio of just 0.08%, compared to 0.35% for the State Street fund. It also offers a higher payout, yielding 1.2% versus 0.3% for its counterpart.
| Metric | XBI | FHLC |
|---|---|---|
| Max drawdown (5 yr) | (63.9%) | (17.7%) |
| Growth of $1,000 over 5 years (total return) | $1,489 | $1,245 |
The Fidelity MSCI Health Care Index ETF holds 365 positions across healthcare and technology. Its largest positions include Eli Lilly & Co (NYSE:LLY) at 13.10%, Johnson & Johnson (NYSE:JNJ) at 9.02%, and Abbvie Inc (NYSE:ABBV) at 6.49%. The fund was launched in 2013, and has paid $1.02 per share over the trailing 12 months, which on its recent ~$82.9 share price works out to a 1.2% yield.
The State Street SPDR S&P Biotech ETF contains 165 holdings primarily in healthcare and financial services. Top holdings include Moderna Inc (NASDAQ:MRNA) at 2.10%, Twist Bioscience Corp (NASDAQ:TWST) at 2.07%, and Natera Inc (NASDAQ:NTRA) at 1.80%. The fund was launched in 2006, and has paid $0.54 per share over the trailing 12 months, which on its recent ~$156.6 share price works out to a 0.3% yield.
For more guidance on ETF investing, check out the full guide at this link.
The Fidelity MSCI Health Care Index ETF (FHLC) and the State Street SPDR S&P Biotech ETF (XBI) offer different approaches to investing in the healthcare sector. Which to pick depends on whether you want to target biotechnology stocks specifically, or prefer exposure to a variety of healthcare companies, including biotech businesses.
XBI is for investors who are comfortable with the high-risk, high-reward biotech niche. The fund delivered an outstanding one-year return, but a much larger max drawdown in a sign of its volatility. XBI can outperform or fall suddenly because the biotech sector is sensitive to regulatory and clinical wins or setbacks. The ETF's equal-weight strategy reduces single-stock dominance, which can be good if a smaller company achieves a treatment breakthrough, but can hurt performance if the opposite is true.
FHLC is the better ETF for conservative investors. It offers greater stability, a superior dividend yield, and a lower expense ratio. That said, its market-cap-weighted approach means its largest holdings can have an outsized impact on fund performance.
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Robert Izquierdo has positions in Johnson & Johnson. The Motley Fool has positions in and recommends AbbVie, Eli Lilly, Moderna, Natera, and Twist Bioscience. The Motley Fool recommends Johnson & Johnson and SPDR Series Trust - SPDR S&P Biotech ETF. The Motley Fool has a disclosure policy.