What is the primary difference between health care and biotechnology ETFs?

Health care ETFs, like Fund A, track broad health care indices, including pharmaceuticals, medical devices and managed care. Biotech ETFs, like Fund B, focus specifically on biotechnology, concentrating on companies developing drugs through biological processes. This means biotech ETFs are typically more volatile and research-intensive, while broader health care ETFs offer diversification across different healthcare subsectors and established companies.

How do expense ratios work in ETFs?

An expense ratio is an annual fee charged by an ETF, expressed as a percentage of the invested amount. It covers the fund's operating costs, such as management fees. For example, a 0.5% expense ratio means an investor pays $5 annually on a $1,000 investment. Lower expense ratios can lead to higher net returns over time. Investors should consider this alongside other factors, including the fund's strategy and performance history.

What does it mean when an ETF's index tracked is 'not available'?

When the index tracked by an ETF is listed as 'not available', it signifies that the specific index the fund aims to replicate is not publicly disclosed. This can limit transparency, making it harder for investors to fully understand the methodology, composition, and potential risks associated with the fund. It does not necessarily mean the ETF is problematic, but rather that this key piece of information is currently unavailable.

How do the holdings of Fund A and Fund B differ?

Fund A features a concentrated approach, with Eli Lilly accounting for 12.79% of assets. In contrast, Fund B's broad holdings reduce single-name risk, with its top position at just 1.91%. While both funds share a focus on the health sector, Fund A's concentration in a few large-cap companies differs from Fund B's diversified, equal-weighted strategy across many biotech companies.

What are the top 10 holdings for each fund?

Fund A's top 10 holdings are: Eli Lilly (LLY) at 12.79%, Johnson & Johnson (JNJ) at 8.72%, AbbVie (ABBV) at 6.26%, Merck (MRK) at 5.04%, UnitedHealth Group (UNH) at 4.89%, Amgen (AMGN) at 3.21%, Thermo Fisher Scientific (TMO) at 3.17%, Abbott Laboratories (ABT) at 2.66%, Gilead Sciences (GILD) at 2.51%, and Pfizer (PFE) at 2.24%. Fund B's top 10 holdings are: Twist Bioscience (TWST) at 1.91%, Moderna (MRNA) at 1.63%, Natera (NTRA) at 1.61%, AbbVie (ABBV) at 1.51%, Halozyme Therapeutics (HALO) at 1.51%, TG Therapeutics (TGTX) at 1.50%, CRISPR Therapeutics (CRSP) at 1.50%, Syre (SYRE) at 1.49%, Orca Bio (ORKA) at 1.49%, and Gilead Sciences (GILD) at 1.48%. AbbVie and Gilead Sciences are shared holdings.

How do dividend yields compare between the two funds?

Fund A, the Health Care Vanguard ETF, has a dividend yield of 1.49%. Fund B, the SPDR S&P Biotech ETF, has a lower dividend yield of 0.36%. Fund A's yield is higher due to the dividends paid by large pharmaceutical and healthcare companies, while Fund B's lower yield reflects its focus on biotech firms, many of which reinvest profits into research and development rather than distributing dividends.

What are the expense ratios of Fund A and Fund B?

Fund A has a low expense ratio of 0.09%, which helps minimise cost drag over time. Fund B has a higher expense ratio of 0.35%, which is nearly four times that of Fund A. This difference is significant for cost-conscious investors, as higher fees can reduce net returns, especially over long holding periods.

What are the net assets of each fund?

Fund A, the Health Care Vanguard ETF, has net assets of $19.1 billion, indicating substantial liquidity and scale. Fund B, the SPDR S&P Biotech ETF, has net assets of $10.3 billion, which also ensures robust market depth and trading efficiency. Larger asset bases often contribute to tighter bid-ask spreads and lower tracking errors.

How does the inception date impact these funds?

Fund A was established in January 2004, and Fund B in January 2006. Both have over 15 years of operational history. A longer track record provides more data points to assess performance and consistency, though it does not guarantee future results. It allows investors to evaluate how each fund has performed across various market cycles.

Can investors easily buy and sell these ETFs?

Yes, ETFs are bought and sold on stock exchanges throughout the trading day, just like regular stocks. This provides investors with flexibility and liquidity. You can place orders to buy or sell at the current market price. However, the ease of trading can depend on the fund's average daily volume and bid-ask spread, which are generally favourable for well-established ETFs.

Are these ETFs a good fit for all investors?

Not necessarily. Fund A's broad health care focus might suit investors seeking diversified exposure to established healthcare companies. Fund B's biotech concentration is for those comfortable with higher volatility and speculative growth in the biotechnology sector. Investors should assess their own risk tolerance, investment objectives, and time horizon when considering these funds.

What does concentration risk mean for Fund A?

Fund A has a top holding weight of 12.79%. Concentration risk arises when a significant portion of a fund's assets is tied to a single security. This means if the top holding underperforms, it can disproportionately impact the fund's overall performance. This contrasts with a more diversified approach that spreads risk across many holdings.

VHT vs XBI

Two funds, one decision: we compare cost, performance and what each ETF actually holds in October 2026.

This page compares the Health Care Vanguard ETF (VHT) and the SPDR S&P Biotech ETF (XBI). It examines fees, holdings, dividends and how each fund tracks its market. VHT has an expense ratio of 0.09%, while XBI is 0.35%. Both funds focus on the health sector, offering investors differing approaches to this area. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

VHT

Metric

XBI

0.09%

Expense Ratio

0.35%

1.49%

Dividend Yield

0.36%

$19.11B

Net Assets

$10.34B

424

Holdings

167

Jan 26, 2004

Inception Date

Jan 31, 2006

–

Index Tracked

–

Health

Fund Category

Health

VHT costs about $26.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	VHT	XBI
ABBVAbbVie Inc.	6.26%	1.51%
GILDGilead Sciences, Inc.	2.51%	1.48%

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Investment Analysis

VHT

Pros

VHT features a low 0.09% expense ratio, significantly reducing cost drag compared to peers.
With $19.1 billion in net assets, the fund offers substantial liquidity and scale.
Established in January 2004, VHT has a lengthy operational history and market presence.

Considerations

Top holdings are concentrated, with Eli Lilly accounting for 12.79% of assets.
The index tracked by VHT is listed as not available, limiting transparency.
VHT's 1.49% dividend yield may underperform sectors with higher income generation.

XBI

Pros

XBI's broad holdings reduce single-name risk, with the top position at just 1.91%.
A $10.3 billion asset base ensures robust market depth and trading efficiency.
Launched in January 2006, XBI has over two decades of operational track record.

Considerations

The 0.35% expense ratio is nearly four times higher than many index ETFs.
A low 0.36% dividend yield limits income potential for yield-focused investors.
The specific index methodology tracked by XBI is listed as not available.

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About VHT and XBI

VHT (VHT)

XBI (XBI)

The SPDR S&P Biotech ETF offers investors access to a broad selection of U.S. biotechnology companies, currently holding approximately 167 stocks. As a Health sector fund, it tracks the performance of the S&P Biotechnology Select Industry Index, which uses equal weighting to give smaller companies a greater influence compared to market-cap weighted indices. With net assets of USD 10.34 billion and an expense ratio of 0.35%, it is a substantial vehicle for sector exposure. The fund currently provides a dividend yield of 0.36%. Biotech is known for its volatility and innovation potential, meaning values can rise and fall significantly. This fund is designed for general educational purposes and does not guarantee returns, so investors should consider their risk tolerance before investing.

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VHT vs XBI

Fund Snapshot