SPDR S&P Health Care Services ETF

SPDR S&P Health Care Services ETF (XHS), from State Street, tracks the S&P Health Care Services Select Industry Index: about 60 U.S. health care providers, managed care companies, distributors and service firms. The index is modified equal weighted, so smaller companies count about as much as larger ones. No holding was above about 2.2% as of June 30, 2026. Its 0.35% expense ratio is well above broad health care funds such as VHT (0.09%).

• Over the year to Oct 27, 2026, XHS returned +33.7%, 1st of 7 among similar funds.
• Its 5-year annualized return was +6.8%.
• Its worst full calendar year was 2022 (-19.9%); its best was 2025 (+18.8%).
• The deepest fall in its price history was 32.6% (Jun 28, 2021 to Jun 16, 2022), recovered by May 27, 2026.

As of Jun 30, 2026, the fund held 61 securities; the ten largest made up 20.35% of assets.

• Over the three months to Jun 30, 2026, investors added a net $28.7M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +9.62%, +4.22%, +15.19%.

The fund follows an index run by S&P Dow Jones Indices. The index covers the health care services part of the S&P Total Market Index, which tracks the broad U.S. stock market. Only four industry groups qualify: health care distributors, health care facilities, health care services and managed health care. A company must be based in the U.S. and pass size and trading tests. Generally it needs a float-adjusted market value of at least $500 million, which counts only the shares the public can trade. Existing members are removed if their value falls below $300 million or their shares trade too little. As of July 31, 2026, the index held 60 stocks.

The index is modified equal weighted. Each company gets roughly the same weight instead of a weight based on its size. The index rebalances and reconstitutes every quarter, on the third Friday of March, June, September and December. A second reweighting follows late in each of those months. Bringing every stock back toward equal weight means trimming winners and adding to laggards. That helps explain the fund's 49% portfolio turnover.

SSGA Funds Management, the adviser, may use sampling. That means it can hold a representative subset of the index instead of every stock. However, it must keep at least 80% of net assets in index securities. It may use futures to manage cash flows. As of June 30, 2026, the fund held 61 stocks, no derivatives and 0.21% in cash.

• XHS charges 0.35% a year, versus an average of 0.31% for the similar funds below (4th of 7, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $36 in the first year and $443 over 10 years (assuming a 5% annual return).

It holds one narrow slice of health care with roughly equal weights in mostly smaller companies, and its losses have taken years to recover.

XHS could add focused exposure to U.S. health care providers and services, a group shaped heavily by government reimbursement and regulation. Its history shows deep, slow-to-heal drops. The fund started in 2011, after the 2008 crisis. It lost 20.68% in the first quarter of 2020. In the 2022 bear market it fell 27.2% between January 3 and June 16, 2022, and it took about 41 months to recover, until November 2025. Its deepest drop, 32.6% from June 2021 to June 2022, took about 47 months to make back. Its worst calendar year was 2022, at -19.86%. Anyone forced to sell during stretches like these would lock in losses. Income is small: the yield was 0.15% as of October 27, 2026, paid quarterly. On $10,000, costs come to about $36 in year one and $443 over 10 years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).