# VHT vs XLV: fees, holdings and returns compared

> VHT vs XLV: what each ETF holds, what it costs, and how both did over the same dates, with yearly returns and worst drops.

XLV holds the health care companies in the S&P 500, about 60, such as large drug makers, device makers and insurers. VHT holds about 410 US health care companies of every size, including many small biotech firms. The same giants lead both. Over the same dates since January 2004, VHT returned about 10.2% a year and XLV returned about 9.9% a year.

Written by [the Tactfolio research team](https://tactfolio.com/about/editorial-policy). Fund facts checked October 17, 2026. Prices through October 20, 2026.

## Key points

- XLV costs less: 0.08% a year against 0.09%.
- VHT started trading in January 2004. XLV started in December 1998.
- Worst drops since 2004: VHT −39.1%, XLV −39.2%.
- Daily correlation: 0.97 (1 means they always move together).

## What is the difference between VHT and XLV?

XLV holds only the largest health care companies. VHT adds hundreds of smaller ones, many of them young biotech companies whose prices can swing a lot on a single drug trial. Those are a small slice of VHT by value, so the two have moved closely, with VHT sometimes swinging a little more.

| Fact | VHT | XLV |
| --- | --- | --- |
| Full name | Vanguard Health Care ETF | State Street Health Care Select Sector SPDR ETF |
| Issuer | Vanguard | SPDR (State Street) |
| Expense ratio | 0.09% a year | 0.08% a year |
| Started trading | January 26, 2004 | December 16, 1998 |
| Tracks | MSCI US Investable Market Health Care 25/50 Index | Health Care Select Sector Index |
| Holdings | 412 holdings as of September 30, 2026 | 61 holdings as of October 15, 2026 |
| Type | US stocks, ETF | US stocks, ETF |

Fund facts checked on the [Vanguard VHT page](https://investor.vanguard.com/investment-products/etfs/profile/vht) and the [SPDR (State Street) XLV page](https://www.ssga.com/us/en/intermediary/etfs/state-street-health-care-select-sector-spdr-etf-xlv).

## Is VHT or XLV cheaper?

XLV costs less: 0.08% a year against 0.09%. On $10,000, that is about $9 a year for VHT and $8 for XLV. The fund takes its fee out of its own value a little each day, so you never get a bill.

## VHT vs XLV performance over the same dates

Both funds are measured from January 2004 to October 2026, the dates both traded. VHT returned about 10.2% a year and XLV returned about 9.9% a year. VHT came out ahead over this period, which does not mean it will again.

| Measure | VHT | XLV |
| --- | --- | --- |
| $10,000 grew to | $90,866 | $84,812 |
| Total return | 808.7% | 748.1% |
| Return per year (CAGR) | 10.2% | 9.9% |
| Worst drop from a high | −39.1% | −39.2% |
| Volatility (how much it swings) | 16.9% | 16.5% |
| Last 12 months | 25.2% | 26.3% |
| Last 3 years, per year | 14.6% | 13.9% |
| Last 5 years, per year | 7.3% | 8.3% |
| Last 10 years, per year | 11.6% | 11.7% |

Prices through October 20, 2026. Figures use daily closing prices adjusted for splits, with dividends reinvested. They do not include taxes or the cost of buying and selling. Past results do not tell you what will happen next.

## VHT and XLV returns by year

| Year | VHT | XLV |
| --- | --- | --- |
| 2026 (part of the year) | 17.1% | 17.6% |
| 2025 | 15.5% | 14.5% |
| 2024 | 2.7% | 2.5% |
| 2023 | 2.5% | 2.1% |
| 2022 | −5.6% | −2.1% |
| 2021 | 20.6% | 26.0% |
| 2020 | 18.3% | 13.3% |
| 2019 | 21.9% | 20.4% |
| 2018 | 5.6% | 6.3% |
| 2017 | 23.3% | 21.8% |
| 2016 | −3.2% | −2.8% |
| 2015 | 7.1% | 6.8% |
| 2014 | 24.2% | 25.1% |
| 2013 | 42.7% | 41.4% |
| 2012 | 19.0% | 17.4% |
| 2011 | 10.7% | 12.4% |
| 2010 | 5.6% | 3.3% |
| 2009 | 21.8% | 19.5% |
| 2008 | −23.3% | −23.3% |
| 2007 | 7.9% | 7.2% |
| 2006 | 6.5% | 7.0% |
| 2005 | 8.2% | 6.4% |
| 2004 (part of the year) | 0.7% | −1.4% |

## Which fell further in bad times?

A drawdown is how far a fund falls from its last high point. VHT's worst fall was −39.1%, from December 10, 2007 to March 5, 2009. It got back to that high on March 3, 2011.

XLV's worst fall was −39.2%, from December 10, 2007 to March 9, 2009. It got back to that high on April 26, 2011.

Their daily moves had a correlation of 0.97. A correlation of 1 means two funds always move up and down together. Near 0 means they move on their own. So holding both adds little variety.

## Why people choose VHT or XLV

**VHT.** People who want health care companies of every size, including small biotech, tend to pick VHT.

**XLV.** People who want the largest US health care companies, or trade often, tend to pick XLV.

## Strategies that hold VHT or XLV

These classic strategies hold one or both at least some of the time. Each is a set of written rules you can open, test and copy.

- [Faber sector rotation (the three strongest US sectors)](https://tactfolio.com/strategies/faber-sector-rotation.md), by Mebane Faber, 2010 (holds XLV)

## Other funds like VHT and XLV

Each fund has more funds that hold the same kind of investments, ranked by how closely they move with it: [VHT alternatives](https://tactfolio.com/alternatives/VHT.md) and [XLV alternatives](https://tactfolio.com/alternatives/XLV.md).

## Test a mix of VHT and XLV

Open the [builder](https://tactfolio.com/builder), add VHT and XLV, and give each a weight, such as 50% and 50%. The backtest shows how the mix would have done, with its worst drop, on daily prices. You can also add a rule, for example to switch between them, and compare. Read the full pages for [VHT](https://tactfolio.com/etf/VHT.md) and [XLV](https://tactfolio.com/etf/XLV.md), or see [more ETF comparisons](https://tactfolio.com/etf-comparisons.md).

## The details

Both funds use Tactfolio's stored daily prices, adjusted for splits, with dividends reinvested. They are compared only on days both traded, starting the later fund's first day, so neither gets a head start. Correlation uses daily returns over the same days. Read [what a backtest simulates](https://tactfolio.com/docs/backtests.md) for more on these measures.

## Research and test it

- [Sector rotation](https://tactfolio.com/learn/sector-rotation): Sector rotation explained: the 11 GICS sectors and their ETFs, business-cycle vs momentum rotation, and a classic rule with dated backtest figures.
- [S&P 500 index](https://tactfolio.com/learn/sp500-index): The S&P 500 tracks about 500 large US companies. Learn how stocks get in, how the index is weighted, how to invest in it, and how far it has fallen before.
- [What is an ETF](https://tactfolio.com/learn/what-is-an-etf): An ETF is a fund that trades like a stock. Learn how ETFs work, what they cost, the main types, and the risks, with SEC sources.
- [ETF screener](https://tactfolio.com/screener.md): A free ETF screener for 162 US-listed funds. Filter by type, issuer and fee, sort by returns or worst drop, and compare funds side by side.
- [ETF expense ratio](https://tactfolio.com/learn/etf-expense-ratio): What an ETF expense ratio is, how the fund charges it, and how 0.03% vs 1% adds up over 10 and 30 years, with real fund examples.
- [Backtest a portfolio](https://tactfolio.com/trading-tools/backtest-portfolio): Backtest a portfolio of US stocks and ETFs. Enter tickers and shares, pick when to rebalance, and get the results with a link to share.

## Common questions

### Do VHT and XLV hold the same stocks?

Their largest holdings are the same. VHT also holds about 350 smaller health care companies.

### Is health care a defensive sector?

People keep needing medicine and care in bad times, so health care stocks have often fallen less than the market in downturns. They can still fall, for example on drug pricing news.

### Which is cheaper, VHT or XLV?

XLV costs less: 0.08% a year against 0.09%. Fees come from each issuer and were checked on October 17, 2026.

### Which did better, VHT or XLV?

From January 2004 to October 2026, VHT returned about 10.2% a year and XLV returned about 9.9% a year, with dividends reinvested. Their worst drops were −39.1% and −39.2%. Past returns do not tell you what comes next.

## Sources

- [Vanguard: Vanguard Health Care ETF fund page](https://investor.vanguard.com/investment-products/etfs/profile/vht)
- [SPDR (State Street): State Street Health Care Select Sector SPDR ETF fund page](https://www.ssga.com/us/en/intermediary/etfs/state-street-health-care-select-sector-spdr-etf-xlv)

> Not financial advice. Tactfolio is a research and automation tool. It is not a broker or a financial adviser. This page is for education only. Backtests are hypothetical. They show how rules would have done on past prices, not how they will do. All investing involves risk, including losing the money you put in.