Should You Invest in the State Street SPDR S&P Pharmaceuticals ETF (XPH)?

The State Street SPDR S&P Pharmaceuticals ETF (XPH) was launched on June 19, 2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Pharma segment of the equity market.While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Pharma is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $296.97 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Pharma segment of the equity market. XPH seeks to match the performance of the S&P Pharmaceuticals Select Industry Index before fees and expenses.The S&P Pharmaceuticals Select Industry Index represents the pharmaceuticals sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Pharmaceuticals Index is a modified equal weight index.CostsCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.It has a 12-month trailing dividend yield of 0.72%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.Looking at individual holdings, Definium Therapeutics Inc (DFTX) accounts for about 2.91% of total assets, followed by Viatris Inc (VTRS) and Edgewise Therapeutics Inc (EWTX).The top 10 holdings account for about 23.91% of total assets under management.Performance and RiskThe ETF has lost about 7.28% so far this year and it's up approximately 22.2% in the last one year (as of 03/30/2026). In that past 52-week period, it has traded between $36.65 and $58.41.The ETF has a beta of 0.55 and standard deviation of 19.22% for the trailing three-year period, making it a high risk choice in the space. With about 59 holdings, it effectively diversifies company-specific risk.AlternativesState Street SPDR S&P Pharmaceuticals ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XPH is a reasonable option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.iShares U.S. Pharmaceuticals ETF (IHE) tracks Dow Jones U.S. Select Pharmaceuticals Index and the VanEck Pharmaceutical ETF (PPH) tracks MVIS US Listed Pharmaceutical 25 Index. iShares U.S. Pharmaceuticals ETF has $965.37 million in assets, VanEck Pharmaceutical ETF has $1.27 billion. IHE has an expense ratio of 0.38%, and PPH charges 0.36%.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street SPDR S&P Pharmaceuticals ETF (XPH): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks