This weekâ??s ETF Talk is the first in a new series that will feature funds that focus on specific market sectors and feature the SPDR Select Sector funds of State Street, which I wrote about in an ETF Talk last year. The first exchange-traded fund (ETF) to be discussed is Health Care Select Sector SPDR ETF (XLV).
SPDR stands for Standard & Poorâ??s depositary receipt. The Select Sector funds are later additions to State Streetâ??s flagship S&P 500-based fund, SPY. The specific industry group ETFs allow investors to focus on a segment of the S&P. Most broad market industries are covered in one of these ETFs. Each S&P company is classified as part of one or more sectors, and the fund provider has categorized them further. XLV, therefore, includes all S&P companies that are considered to be part of the healthcare industry. This sector includes pharmaceuticals and biotechnology companies, as well as health care providers, equipment, technology and other related services.
In the last 12 months of trading, even considering the recent market pullback, XLV has posted a 9.8% gain to improve its current assets managed figure to $12.9 billion. The fund also offers a dividend yield of about 1.5% as an added benefit for its investors.
XLV holds a considerable 54.46% of its assets in its 10 largest positions. Much like the S&P itself, the fund gives more weight to companies with larger market caps. XLVâ??s top holdings include Johnson & Johnson (JNJ), 10.27%; Pfizer Inc. (PFE), 8.00%; Gilead Sciences Inc. (GILD), 5.67%; Merck & Co. Inc. (MRK), 5.48%; and UnitedHealth Group Inc. (UNH), 4.61%.
If the healthcare industry seems broadly appealing to you, you may want to take a look at Health Care Select Sector SPDR ETF (XLV). In this column next week, Iâ??ll have another sector highlighted for your consideration.
Remember to look for the current price, volume, performance and top 10 holdings of XLV at ETFU.com.
If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter.
As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.
In case you missed it, I encourage you to read my e-letter column from last week about a Chinese market fund. I also invite you to comment in the space provided below.
Sign up to the Human Events newsletter