What XLV actually is

XLV follows the health care companies in the S&P 500, one of the Select Sector SPDR funds.

What is inside

Large drugmakers such as Eli Lilly, Johnson & Johnson, AbbVie and Merck, insurers such as UnitedHealth, and medical-device and biotech companies.

Distributions

XLV pays a quarterly dividend. The yield is moderate and the payers are usually stable, though a few big names matter a lot.

What to keep in mind

  • Policy risk. Drug pricing and insurance rules.
  • Patent expiries. Drugmakers face cheaper copies.
  • Concentration. A few companies lead.

Quick take

XLV is a defensive sector fund with moderate income, for people who want health care exposure in one purchase.