State Street vs. First Trust: Is a Broad Healthcare or Biotech Focus Better for Your Portfolio?
FBT delivered 48.5% returns over one year but carries a 0.55% expense ratio and experiences greater volatility. XLV offers lower costs, with an 0.08% expense ratio, as well as broader diversification across 60 healthcare stocks.
Overview
Determining whether State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) or First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) fits a portfolio depends on an investor's preference for broad-sector stability or concentrated biotechnology exposure.
Both funds target the healthcare space but with very different scopes. XLV tracks the entire healthcare sector within the S&P 500, including giants in pharmaceuticals and medical devices. FBT focuses strictly on biotechnology companies, offering a narrower and historically more volatile path into medical innovation.
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.
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Source
Originally published at www.fool.com.