VHT vs. XBI: Vanguard Health Care ETF Tops SPDR Biotech in Yield and Cost

Jake Lerch, The Motley Fool

Thu, May 28, 2026 astatine 7:27 AM CDT 5 min read

The Vanguard Health Care ETF (NYSEMKT:VHT) offers broad, low-cost vulnerability to the afloat healthcare sector, whereas the State Street SPDR S&P Biotech ETF (NYSEMKT:XBI) provides a targeted, much volatile stake connected biotechnology firms.

Both funds service arsenic superior vehicles for gaining healthcare exposure, yet they employment chiseled strategies. Investors whitethorn take betwixt a broad sector-wide attack oregon a circumstantial sub-industry absorption that utilizes a modified equal-weighting methodology to seizure the maturation imaginable of smaller biotechnology companies.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The Vanguard money is noticeably much affordable with an disbursal ratio of 0.09%, compared to 0.35% for the SPDR fund. It besides offers a higher payout, yielding 1.70% compared to XBI’s 0.30%.

Performance & hazard examination

What's wrong

The Vanguard Health Care ETF provides vulnerability to 411 holdings crossed the healthcare sector, including providers, instrumentality manufacturers, and exertion companies. Passively managed, it uses a full-replication oregon sampling strategy to way its benchmark. Its largest positions see Eli Lilly (NYSE:LLY) astatine 12.12%, Johnson & Johnson (NYSE:JNJ) astatine 8.81%, and AbbVie (NYSE:ABBV) astatine 6.03%. Launched successful 2004, the money has paid $4.70 per stock implicit the trailing 12 months. It provides a diversified mode to ain large-cap leaders successful pharmaceuticals and healthcare services.

In contrast, the State Street SPDR S&P Biotech ETF focuses specifically connected the biotechnology sub-industry with 151 holdings. It tracks a modified equal-weighted index, providing unconcentrated vulnerability to large-, mid-, and small-cap stocks. Top holdings see Revolution Medicines (NASDAQ:RVMD) astatine 1.72%, Travere Therapeutics (NASDAQ:TVTX) astatine 1.69%, and Tg Therapeutics (NASDAQ:TGTX) astatine 1.66%. Launched successful 2006, the money has a trailing-12-month dividend of $0.44 per share. By tracking its targeted index, it provides higher vulnerability to smaller biotechnology firms than its market-cap-weighted peers.

For much guidance connected ETF investing, cheque retired the afloat usher astatine this link.