Better State Street Healthcare ETF: XBI's Biotech Focus vs. XPH Targeting Pharmaceuticals
XPH delivered 19% higher returns over five years despite half the volatility. XBI's 165 holdings offer broader exposure but with a 53% maximum drawdown.
Overview
The choice between the State Street SPDR S&P Biotech ETF (NYSEMKT:XBI) and State Street SPDR S&P Pharmaceuticals ETF (NYSEMKT:XPH) centers on an investor's tolerance for volatility and preference for specific healthcare sub-sectors.
Both exchange-traded funds offer targeted exposure to critical segments of the healthcare industry. While the biotechnology sector is characterized by high-growth potential and significant price swings, the pharmaceutical industry often provides a more stable alternative for investors who want healthcare exposure without the intense volatility associated with clinical-stage research firms.
Details
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.
Source
Originally published at www.fool.com.