XLV vs. IWM

Last updated Jul 22, 2026

XLV (State Street Health Care Select Sector SPDR ETF) and IWM (iShares Russell 2000 ETF) are both exchange-traded funds - XLV is a Health & Biotech Equities fund tracking the Health Care Select Sector Index, while IWM is a Small Cap Blend Equities fund tracking the Russell 2000 Index. Both are passively managed. Over the past 10 years, XLV returned 9.71%/yr vs 10.81%/yr for IWM. A 0.62 correlation means they provide meaningful diversification when combined. XLV charges 0.08%/yr vs 0.19%/yr for IWM.

Performance

XLV vs. IWM - 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 Russell 2000 ETF (IWM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XLV achieves a 4.40% return, which is significantly lower than IWM's 20.97% return. Over the past 10 years, XLV has underperformed IWM with an annualized return of 9.71%, while IWM has yielded a comparatively higher 10.81% annualized return.

XLV

• 1D: 0.63%
• 1M: 7.74%
• 6M: 4.00%
• YTD: 4.40%
• 1Y: 24.38%
• 3Y*: 7.34%
• 5Y*: 5.98%
• 10Y*: 9.71%
• ALL TIME*: 8.58%

IWM

• 1D: 1.45%
• 1M: 0.32%
• 6M: 13.40%
• YTD: 20.97%
• 1Y: 35.31%
• 3Y*: 16.47%
• 5Y*: 7.63%
• 10Y*: 10.81%
• ALL TIME*: 8.82%

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

XLV vs. IWM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLV State Street Health Care Select Sector SPDR ETF	4.40%	14.50%	2.47%	2.07%	-2.08%	26.04%	13.30%	20.45%	6.28%	21.77%
IWM iShares Russell 2000 ETF	20.97%	12.66%	11.38%	16.83%	-20.48%	14.54%	20.03%	25.39%	-11.12%	14.58%

Correlation

The correlation between XLV and IWM is 0.32, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.32
Correlation (3Y) Calculated over the trailing 3-year period	0.44
Correlation (5Y) Calculated over the trailing 5-year period	0.50
Correlation (10Y) Calculated over the trailing 10-year period	0.53
Correlation (All Time) Calculated using the full available price history since May 26, 2000	0.62

Over the past year, the correlation between XLV and IWM has dropped to 0.32 - well below their long-term average of 0.62, suggesting their price drivers have been diverging.

XLV vs. IWM - Sectors Allocation Comparison

Sectors	XLV	IWM
Healthcare	100.0%	20.5%
Basic Materials	-	4.3%
Communication Services	-	1.9%
Consumer Cyclical	-	9.0%
Consumer Defensive	-	2.6%
Energy	-	5.8%
Financial Services	-	17.9%
Industrials	-	13.9%
Real Estate	-	6.6%
Technology	-	14.3%
Utilities	-	2.9%

Return for Risk

XLV vs. IWM — Risk / Return Rank

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

XLV

XLV Risk / Return Rank: 61
XLV Sharpe Ratio Rank: 63
XLV Sortino Ratio Rank: 71
XLV Omega Ratio Rank: 59
XLV Calmar Ratio Rank: 63
XLV Martin Ratio Rank: 46

IWM

IWM Risk / Return Rank: 77
IWM Sharpe Ratio Rank: 77
IWM Sortino Ratio Rank: 77
IWM Omega Ratio Rank: 70
IWM Calmar Ratio Rank: 83
IWM Martin Ratio Rank: 81

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. IWM - 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 Russell 2000 ETF (IWM). 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.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	XLV	IWM	Difference
Sharpe ratio: Return per unit of total volatility	1.55	1.83	-0.28
Sortino ratio: Return per unit of downside risk	2.42	2.59	-0.17
Omega ratio: Gain probability vs. loss probability	1.27	1.31	-0.04
Calmar ratio: Return relative to maximum drawdown	2.34	3.22	-0.88
Martin ratio: Return relative to average drawdown	5.52	11.33	-5.81

XLV vs. IWM - Sharpe Ratio Comparison

The current XLV Sharpe Ratio is 1.55, which is comparable to the IWM Sharpe Ratio of 1.83. The chart below compares the historical Sharpe Ratios of XLV and IWM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

XLV vs. IWM - Drawdown Comparison

The maximum XLV drawdown since its inception was -39.17%, smaller than the maximum IWM drawdown of -59.05%. Use the drawdown chart below to compare losses from any high point for XLV and IWM.

Drawdown Indicators

	XLV	IWM	Difference
Max Drawdown Largest peak-to-trough decline	-39.17%	-59.05%	+19.88%
Max Drawdown (1Y) Largest decline over 1 year	-10.47%	-11.03%	+0.56%
Max Drawdown (3Y) Largest decline over 3 years	-17.11%	-27.50%	+10.39%
Max Drawdown (5Y) Largest decline over 5 years	-17.11%	-31.91%	+14.80%
Max Drawdown (10Y) Largest decline over 10 years	-28.40%	-41.13%	+12.73%
Current Drawdown Current decline from peak	-2.55%	-1.30%	-1.25%
Average Drawdown Average peak-to-trough decline	-7.10%	-10.72%	+3.62%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.42%	3.12%	+1.30%

Volatility

XLV vs. IWM - Volatility Comparison

State Street Health Care Select Sector SPDR ETF (XLV) has a higher volatility of 6.24% compared to iShares Russell 2000 ETF (IWM) at 3.36%. This indicates that XLV's price experiences larger fluctuations and is considered to be riskier than IWM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLV	IWM	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.24%	3.36%	+2.88%
Volatility (6M) Calculated over the trailing 6-month period	11.90%	14.23%	-2.33%
Volatility (1Y) Calculated over the trailing 1-year period	15.84%	19.38%	-3.54%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	14.99%	22.49%	-7.50%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.63%	23.01%	-6.38%

XLV vs. IWM - Expense Ratio Comparison

XLV has a 0.08% expense ratio, which is lower than IWM's 0.19% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

XLV vs. IWM - Dividend Comparison

XLV's dividend yield for the trailing twelve months is around 1.58%, more than IWM's 0.90% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IWM iShares Russell 2000 ETF	0.90%	1.04%	1.15%	1.35%	1.48%	0.94%	1.04%	1.26%	1.40%	1.26%	1.38%	1.54%
XLV State Street Health Care Select Sector SPDR ETF	1.58%	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 IWM in my portfolio?

XLV and IWM have a correlation of 0.32, 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 IWM?

XLV has higher volatility (6.24%) compared to IWM (3.36%). In terms of maximum drawdown, XLV dropped -39.17% vs IWM's -59.05%.

Which ETF is better, XLV or IWM?

On 10-year performance, IWM leads with 10.81% vs 9.71% for XLV. On fees, XLV is cheaper at 0.08% per year. On volatility, IWM has been the lower-risk option at 3.36%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLV or IWM?

Over the 10-year period, IWM has performed better with a 10.81% return vs 9.71%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLV or IWM?

XLV is cheaper with a 0.08% expense ratio, compared with 0.19% for IWM.

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

XLV has the higher dividend yield at 1.58%, compared with 0.90% for IWM.

What is the main difference between XLV and IWM?

XLV is categorized as Health & Biotech Equities, while IWM is Small Cap Blend Equities. XLV tracks Health Care Select Sector Index, while IWM tracks Russell 2000 Index. They also come from different issuers: State Street and iShares. Their fees differ too: 0.08% for XLV and 0.19% for IWM.

Which has better risk-adjusted returns?

IWM currently has the higher Sharpe Ratio (1.83 vs 1.55), 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.