State Street XLV vs VanEck BBH: Which Healthcare ETF Is the Better Buy in 2026?

State Street Health Care Select Sector SPDR ETF offers a significantly lower expense ratio than VanEck Biotech ETF

VanEck Biotech ETF focuses exclusively on 25 biotechnology stocks while State Street Health Care Select Sector SPDR ETF holds 60 diverse healthcare names

State Street Health Care Select Sector SPDR ETF has demonstrated higher risk-adjusted growth and a smaller maximum drawdown over the last five years

The State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) offers broad-sector exposure with a lower cost, while VanEck Biotech ETF (NASDAQ:BBH) provides targeted, concentrated access to biotechnology leaders.

Both funds serve as foundational tools for capturing growth in the medical space, but operate with different levels of specificity. The State Street Health Care Select Sector SPDR ETF represents the broad healthcare landscape within the S&P 500, while the VanEck Biotech ETF targets companies specializing in genetic research and diagnostic technologies.

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.

Cost-conscious investors may find the State Street Health Care Select Sector SPDR ETF more appealing, as its 0.08% expense ratio is a fraction of the 0.35% charged by the VanEck Biotech ETF. Beyond management fees, the SPDR fund also provides a substantially higher dividend payout for income-seeking portfolios.

The State Street Health Care Select Sector SPDR ETF tracks the Healthcare Select Sector Index, providing a balanced mix of pharmaceuticals, healthcare providers, and life sciences companies. It holds 60 stocks, and its largest positions include Eli Lilly and Co (NYSE:LLY) at 16.5%, Johnson and Johnson (NYSE:JNJ) at 10.6%, and Abbvie Inc (NYSE:ABBV) at 7.7%. The fund was launched in 1998. State Street Health Care Select Sector SPDR ETF has paid $2.50 per share over the trailing 12 months, which on its recent ~$163.5 share price works out to a 1.6% yield.