Should You Invest in the State Street SPDR S&P Health Care Services ETF (XHS)?

If you're interested in broad exposure to the Healthcare - Services segment of the equity market, look no further than the State Street SPDR S&P Health Care Services ETF (XHS), a passively managed exchange traded fund launched on September 28, 2011.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Services is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.

Index Details

The fund is sponsored by State Street Investment Management. It has amassed assets over $221.1 million, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Services segment of the equity market. XHS seeks to match the performance of the S&P Health Care Services Select Industry Index before fees and expenses.

The S&P Health Care Services Select Industry Index represents the health care sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Health Care Index is a modified equal weight index.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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 0.2%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.

The top 10 holdings account for about 22.65% of total assets under management.

Performance and Risk

So far this year, XHS return is roughly 27.29%, and is up roughly 36.16% in the last one year (as of 09/14/2026). During this past 52-week period, the fund has traded between $97.279 and $137.73.

The ETF has a beta of 0.93 and standard deviation of 17.88% for the trailing three-year period, making it a medium risk choice in the space. With about 62 holdings, it effectively diversifies company-specific risk.

Alternatives

State Street SPDR S&P Health Care Services 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, XHS 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.

() tracks . The fund has $0.00 million in assets. has an expense ratio of 0%.

Bottom Line

To 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.

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This article originally published on Zacks Investment Research (zacks.com).

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