State Street Health Care Select Sector SPDR ETF

XLV

Market cap $42.5B

The healthcare sector is poised to benefit next from the ongoing market rotation to value and defensives. XLP's rapid ascent has led to overbought technicals and a valuation premium, with forward P/E ratios exceeding many growth-oriented megacaps.

The market is shaky, software stocks have gone off a cliff, and semiconductor stocks are giving back some of their gain. It's time to tweak your portfolio.

Sector investing — it's a typical strategy for advisors if their clients are looking beyond broad market exposure by targeting a specific sector. The concept is fairly straightforward, but implementing the strategy is not as simple as it sounds.

Healthcare isn't going anywhere. An aging population, chronic disease management, and breakthrough treatments ensure this sector remains essential regardless of market conditions.

The State Street Health Care Select Sector SPDR ETF ETF (XLV) was launched on December 16, 1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Broad segment of the equity market.

Energy, basic materials, and defensive consumer stocks are in. Tech and financials are out.

Over the past three years, healthcare has been among the worst-performing sectors. 2026's market rotation away from tech is bringing new life to more defensive areas of the market.

Big Pharma delivered strong Q4 2025 results, with most companies beating revenue and EPS expectations and providing generally solid 2026 guidance. Eli Lilly solidified its leadership in obesity and diabetes, outpacing Novo Nordisk, which faces a sharp 2026 revenue decline amid fierce competition, pricing pressure, and other factors.

From "software-mageddon" to rising AI capex pressuring Big Tech, diversification via defensive and global ETFs gains focus.

Three of the smallest sectors in the S&P 500 delivered the index's strongest performance in January, while the two largest sectors weighed on returns. The broad market index gained modest ground last month, with the State Street SPDR S&P 500 ETF Trust (SPY) up 0.6%, according to ETF Database.