Better State Street Healthcare ETF: XBI's Biotech Focus vs. XPH Targeting Pharmaceuticals
Key PointsThe State Street SPDR S&P Biotech ETF and State Street SPDR S&P Pharmaceuticals ETF carry identical 0.35% expense ratios.
When choosing between the State Street SPDR S&P Biotech ETF (XBI) and the State Street SPDR S&P Pharmaceuticals ETF (XPH), investors must weigh their risk tolerance against their desire for sector specificity. Both funds provide concentrated exposure to distinct healthcare sub-sectors within the industry.
Biotechnology stocks are notorious for their high-growth potential but also exhibit considerable price fluctuations. On the other hand, pharmaceutical companies generally offer a more stable investment option for those seeking healthcare exposure without the intense volatility typically associated with biotech firms still in early-stage clinical research.
To assess the risk profile of each ETF, analysts often examine the beta coefficient, which quantifies price volatility relative to the S&P 500. Beta is derived from analyzing monthly returns over the fund's history, typically spanning up to five years. For instance, over the past year, XBI has delivered a total return of 37.17%, while XPH has returned 29.60%. Both funds distribute dividends based on their trailing-12-month earnings.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
