IYH vs XHS

IYHAiShares U.S. Healthcare ETF

XHSAState Street SPDR S&P Health Care Services ETF

In short

IYH Healthcare in one ticker from the class of 2000: roughly 100 drug, biotech and device names drawn from the Russell 1000, with index caps that stop any single giant from running the show.

XHS Most health care ETFs are pharma funds in disguise. XHS buys the delivery system instead: insurers, hospitals, distributors and clinics, roughly equal weighted so one giant insurer does not run the show.

Stated mandate

IYH The fund is designed to follow a healthcare-sector equity index focused on U.S. companies, while providing diversified exposure to pharmaceuticals, biotechnology, and healthcare equipment.

XHS The fund seeks to track the total return of the S&P Health Care Services Select Industry Index before fees and expenses, providing targeted exposure to health care services companies.

Why people hold it

• IYH The index is a Russell 1000 subset covering large and mid caps, so the fund reaches past mega-cap pharma into smaller device and biotech issuers.sec.gov
• Concentration has a documented ceiling: at each quarterly rebalance no single issuer tops 22.5%, and positions above 4.5% are capped at 45% combined.sec.gov
• At 0.37% with no waiver in the mix, the fee sits below the healthcare category median, and the fund has traded since June 12, 2000.
• A multi-billion-dollar, actively traded iShares sector fund that pays quarterly and holds the stocks outright rather than swapping for exposure.ishares.com

• XHS No drugmakers, no device makers. The index tracks four slices of care delivery: distributors, facilities, health care services and managed care.ssga.com
• Modified equal weighting spreads about 60 names across large, mid and small caps, so the portfolio is not a bet on two or three mega caps.ssga.com
• 0.35% a year sits below the 0.50% median for broad health care ETFs, on a fund that has been running since 2011.
• Ranks in the top quartile of the broad health care ETFs we grade.

Worth knowing

• IYH Cheaper routes to the same sector exist: XLV charges 0.08% and VHT 0.09%, neither relying on a waiver, against 0.37% here.
• One sector, one country. Regulation, patent cycles and drug pricing drive it, with no bonds or foreign names in the mix to soften the ride.
• Even with the caps, about 100 stocks means a handful of large pharma and device makers shape most of the movement.sec.gov

• XHS Cheap against the median, not against the giants: XLV, VHT and FHLC charge under a tenth of a percent for cap weighted whole sector exposure.
• Thinly traded next to the big sector funds, so spreads and limit orders matter more here.
• Leaving out pharma and biotech means it moves differently from a whole sector fund, and insurers and hospitals sit close to reimbursement policy.ssga.com

Full IYH profile⁠

Full XHS profile⁠