XLV vs. IHE

Last updated Jun 5, 2026

XLV (State Street Health Care Select Sector SPDR ETF) and IHE (iShares U.S. Pharmaceuticals ETF) are both Health & Biotech Equities funds - XLV tracks the Health Care Select Sector Index while IHE tracks the Dow Jones U.S. Select Pharmaceuticals Index. Both are passively managed. Over the past 10 years, XLV returned 9.48%/yr vs 7.97%/yr for IHE. Their correlation of 0.86 suggests significant overlap in exposure. XLV charges 0.08%/yr vs 0.42%/yr for IHE.

Performance

XLV vs. IHE - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in State Street Health Care Select Sector SPDR ETF (XLV) and iShares U.S. Pharmaceuticals ETF (IHE). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XLV achieves a -1.35% return, which is significantly lower than IHE's 9.33% return. Over the past 10 years, XLV has outperformed IHE with an annualized return of 9.48%, while IHE has yielded a comparatively lower 7.97% annualized return.

XLV

• 1D: 3.07%
• 1M: 4.67%
• YTD: -1.35%
• 6M: -0.35%
• 1Y: 16.13%
• 3Y*: 6.92%
• 5Y*: 6.19%
• 10Y*: 9.48%

IHE

• 1D: 2.69%
• 1M: 3.48%
• YTD: 9.33%
• 6M: 12.42%
• 1Y: 43.59%
• 3Y*: 18.33%
• 5Y*: 10.57%
• 10Y*: 7.97%

*Multi-year figures are annualized to reflect compound growth (CAGR)

XLV vs. IHE - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLV State Street Health Care Select Sector SPDR ETF	-1.35%	14.50%	2.47%	2.07%	-2.08%	26.04%	13.30%	20.45%	6.28%	21.77%
IHE iShares U.S. Pharmaceuticals ETF	9.33%	31.69%	8.13%	1.06%	-4.87%	13.07%	13.66%	15.47%	-7.76%	10.64%

Correlation

The correlation between XLV and IHE is 0.85, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.85
Correlation (3Y) Calculated over the trailing 3-year period	0.83
Correlation (5Y) Calculated over the trailing 5-year period	0.84
Correlation (10Y) Calculated over the trailing 10-year period	0.84
Correlation (All Time) Calculated using the full available price history since May 8, 2006	0.86

The correlation between XLV and IHE has been stable across timeframes, ranging from 0.83 to 0.86 - a consistent structural relationship.

XLV vs. IHE - Sectors Allocation Comparison

Sectors	XLV	IHE
Healthcare	100.0%	100.0%
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Industrials	-	-
Real Estate	-	-
Technology	-	-
Utilities	-	-

Return for Risk

XLV vs. IHE — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

XLV

XLV Risk / Return Rank: 31
XLV Sharpe Ratio Rank: 31
XLV Sortino Ratio Rank: 34
XLV Omega Ratio Rank: 29
XLV Calmar Ratio Rank: 32
XLV Martin Ratio Rank: 27

IHE

IHE Risk / Return Rank: 81
IHE Sharpe Ratio Rank: 79
IHE Sortino Ratio Rank: 83
IHE Omega Ratio Rank: 73
IHE Calmar Ratio Rank: 88
IHE Martin Ratio Rank: 80

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

XLV vs. IHE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Health Care Select Sector SPDR ETF (XLV) and iShares U.S. Pharmaceuticals ETF (IHE). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	XLV	IHE	Difference
Sharpe ratio: Return per unit of total volatility	1.08	2.54	-1.45
Sortino ratio: Return per unit of downside risk	1.72	3.67	-1.95
Omega ratio: Gain probability vs. loss probability	1.19	1.43	-0.24
Calmar ratio: Return relative to maximum drawdown	1.55	5.17	-3.62
Martin ratio: Return relative to average drawdown	3.73	15.58	-11.85
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLV vs. IHE - Sharpe Ratio Comparison

The current XLV Sharpe Ratio is 1.08, which is lower than the IHE Sharpe Ratio of 2.54. The chart below compares the historical Sharpe Ratios of XLV and IHE, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	XLV	IHE	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.08	2.54	-1.45
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.42	0.65	-0.23
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.57	0.44	+0.13
Sharpe Ratio (All Time) Calculated using the full available price history	0.46	0.51	-0.05

Drawdowns

XLV vs. IHE - Drawdown Comparison

The maximum XLV drawdown since its inception was -39.17%, roughly equal to the maximum IHE drawdown of -38.20%. Use the drawdown chart below to compare losses from any high point for XLV and IHE.

Drawdown Indicators

	XLV	IHE	Difference
Max Drawdown Largest peak-to-trough decline	-39.17%	-38.20%	-0.97%
Max Drawdown (1Y) Largest decline over 1 year	-10.47%	-8.47%	-2.00%
Max Drawdown (3Y) Largest decline over 3 years	-17.11%	-15.92%	-1.19%
Max Drawdown (5Y) Largest decline over 5 years	-17.11%	-16.03%	-1.08%
Max Drawdown (10Y) Largest decline over 10 years	-28.40%	-29.59%	+1.19%
Current Drawdown Current decline from peak	-4.68%	-0.18%	-4.50%
Average Drawdown Average peak-to-trough decline	-7.12%	-7.92%	+0.80%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.33%	2.81%	+1.52%

Volatility

XLV vs. IHE - Volatility Comparison

The current volatility for State Street Health Care Select Sector SPDR ETF (XLV) is 5.04%, while iShares U.S. Pharmaceuticals ETF (IHE) has a volatility of 6.04%. This indicates that XLV experiences smaller price fluctuations and is considered to be less risky than IHE based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLV	IHE	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.04%	6.04%	-1.00%
Volatility (6M) Calculated over the trailing 6-month period	10.67%	12.70%	-2.03%
Volatility (1Y) Calculated over the trailing 1-year period	14.97%	17.26%	-2.29%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	14.76%	16.28%	-1.52%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.57%	18.07%	-1.50%

XLV vs. IHE - Expense Ratio Comparison

XLV has a 0.08% expense ratio, which is lower than IHE's 0.42% expense ratio.

Dividends

XLV vs. IHE - Dividend Comparison

XLV's dividend yield for the trailing twelve months is around 1.65%, more than IHE's 1.61% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IHE iShares U.S. Pharmaceuticals ETF	1.61%	1.76%	1.73%	1.39%	2.01%	1.49%	1.19%	1.40%	1.25%	1.36%	0.92%	1.93%
XLV State Street Health Care Select Sector SPDR ETF	1.65%	1.60%	1.67%	1.59%	1.47%	1.33%	1.49%	2.17%	1.57%	1.47%	1.60%	1.43%

Frequently Asked Questions

Can I hold both XLV and IHE in my portfolio?

XLV and IHE have a correlation of 0.85, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLV or IHE?

IHE has higher volatility (6.04%) compared to XLV (5.04%). In terms of maximum drawdown, XLV dropped -39.17% vs IHE's -38.20%.

Which ETF is better, XLV or IHE?

On 10-year performance, XLV leads with 9.48% vs 7.97% for IHE. On fees, XLV is cheaper at 0.08% per year. On volatility, XLV has been the lower-risk option at 5.04%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLV or IHE?

Over the 10-year period, XLV has performed better with a 9.48% return vs 7.97%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLV or IHE?

XLV is cheaper with a 0.08% expense ratio, compared with 0.42% for IHE.

Which ETF pays a higher dividend yield, XLV or IHE?

XLV has the higher dividend yield at 1.65%, compared with 1.61% for IHE.

What is the main difference between XLV and IHE?

XLV tracks Health Care Select Sector Index, while IHE tracks Dow Jones U.S. Select Pharmaceuticals Index. They also come from different issuers: State Street and iShares. Their fees differ too: 0.08% for XLV and 0.42% for IHE.

Which has better risk-adjusted returns?

IHE currently has the higher Sharpe Ratio (2.54 vs 1.08), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.