XLV vs PBE: Is a Low-Cost Healthcare ETF the Better Buy Than a Focused Biotech Specialist?
PBE surged 41% in one year but endured a 35% drawdown, while XLV's diversified approach delivered steadier gains with half the volatility.
Overview
The State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) offers broad exposure to the S&P 500 healthcare sector at a low cost, whereas the Invesco Biotechnology & Genome ETF (NYSEMKT:PBE) targets a concentrated niche of biotechnology companies.
Choosing between these two ETFs involves balancing broad sector stability against the high-growth potential of a specific industry. While XLV offers diversified exposure to the largest healthcare names in the S&P 500, PBE utilizes a quantitative approach to target 30 U.S. firms leading the way in genomic engineering and biotechnology research. This comparison highlights the trade-offs between a low-cost, established fund and a more specialized, higher-fee industry play.
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-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on July 30.
Source
Originally published at www.fool.com.