Essential Insights

State Street Health Care Select Sector SPDR ETF charges a notably lower expense ratio of 0.08 percent versus the 0.55 percent fee for First Trust NYSE Arca Biotechnology Index Fund.
First Trust targets just 30 biotechnology firms exclusively, whereas the SPDR ETF maintains 60 holdings spanning the wider healthcare field.
SPDR has recorded a milder five-year peak decline of 17.1 percent against the 29.9 percent drop experienced by the First Trust fund.

Selecting between State Street Health Care Select Sector SPDR ETF and First Trust NYSE Arca Biotechnology Index Fund for portfolio inclusion turns on an investor preference for wide-sector steadiness or concentrated biotechnology access.

Both products aim at healthcare yet pursue distinct ranges. The SPDR vehicle follows the full healthcare component of the S&P 500, encompassing major pharmaceutical and medical-device leaders. The First Trust product limits itself to biotechnology names, delivering a tighter and typically more variable route to medical advances.

Snapshot of Costs and Scale

Metric	FBT	XLV
Issuer	First Trust	SPDR
Share price (as of July 27, 2026)	$246.74	$163.40
Expense ratio	0.55%	0.08%
1-year return (as of July 27, 2026)	48.5%	21.8%
Dividend yield	N/A	1.6%
Beta	0.66	0.55
AUM	$2.8 billion	$42.1 billion

Beta reflects price movement relative to the S&P 500 and draws from monthly returns across available fund history up to five years. The one-year return shows total performance over the prior twelve months. Dividend yield uses the trailing twelve-month distribution rate.

The SPDR option proves more economical with an annual fee of only 0.08 percent. The First Trust fee of 0.55 percent stands markedly higher. These charges mirror the contrast between a broad-market benchmark and a specialized industry approach.

Performance and Risk Review

Metric	FBT	XLV
Max drawdown (5 year)	(29.9%)	(17.1%)
Growth of $1,000 over 5 years (total return)	$1,467	$1,346

The SPDR fund supplies targeted exposure to the broader healthcare industry inside the S&P 500, spanning pharmaceuticals and health technology. Leading positions feature Eli Lilly at 16.13 percent, Johnson & Johnson at 10.81 percent, and AbbVie at 7.81 percent. The fund holds 60 securities overall and began in 1998. This structure lets investors execute precise strategic allocations beyond conventional style categories.

The First Trust ETF allocates entirely to healthcare, specifically biotechnology. Its portfolio contains 30 positions and tracks the NYSE Arca Biotechnology Index. Top holdings comprise BeOne Medicines at 3.66 percent, Halozyme Therapeutics at 3.61 percent, and Amgen at 3.48 percent. The fund launched in 2006. Its primary goal is to replicate the benchmark before fees and expenses.

Implications for Investors

This ETF comparison reduces to a choice between concentration and breadth, along with smaller versus larger scale. In short, the preferred fund will align with an investor tolerance for risk.

The SPDR fund holds twice the number of securities as First Trust, aiding risk distribution. It also commands far greater assets under management, exceeding 40 billion dollars compared with under 3 billion for the First Trust product. That scale difference carries further effects. First Trust average trading volume remains minimal relative to the SPDR fund, implying reduced liquidity that could sway certain decisions.

Another factor involves portfolio makeup. First Trust holds only biotechnology names, limited to 30. Stocks within the same subsector often move together, so disappointing results from one firm can pressure multiple holdings. By contrast, the SPDR top ten includes major pharmaceutical companies, a medical-device leader, and a health insurer. This spread may offer added downside buffering.

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Erin Kennedy holds no positions in the mentioned securities. The Motley Fool maintains positions in and recommends AbbVie, Amgen, BeOne Medicines, and Eli Lilly. The Motley Fool recommends Johnson & Johnson. The Motley Fool maintains a disclosure policy.

The opinions expressed here belong to the author and do not necessarily represent those of Nasdaq, Inc.