Investors choosing between Simplify Health Care ETF (NYSEMKT:PINK) and State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) may weigh the SPDR fund’s significantly lower costs against the Simplify fund’s active management and charitable mission.
Both funds provide targeted exposure to the healthcare sector, yet they operate with fundamentally distinct philosophies. One offers a low-cost, passive entry into the largest blue chip companies in the S&P 500 healthcare index, while the other employs active management and a unique charitable mandate to pursue capital appreciation through innovation.
Snapshot (cost & size)
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The expense difference between these two products is stark. The State Street fund’s 0.08% expense ratio makes it significantly more affordable for long-term holders than the Simplify fund’s 0.51% fee. Furthermore, the State Street fund offers a notably higher dividend yield, which may appeal to investors seeking consistent cash flow.
Performance & risk comparison
What’s inside
State Street Health Care Select Sector SPDR ETF (NYSEMKT:XLV) focuses on large-cap stability by tracking the Health Care Select Sector Index, providing exposure to 60 holdings across pharmaceuticals and biotechnology. Its sector makeup is highly concentrated, with approximately 99.00% of the portfolio dedicated to healthcare firms. Its largest positions include Eli Lilly (NYSE:LLY) at 16.11%, Johnson & Johnson (NYSE:JNJ) at 10.72%, and AbbVie (NYSE:ABBV) at 7.79%. It was launched in 1998. State Street Health Care Select Sector SPDR ETF has paid $2.53 per share over the trailing 12 months, which, at its recent ~$161.4 share price, yields 1.60%.
Simplify Health Care ETF (NYSEMKT:PINK) is an actively managed fund overseen by Michael Taylor, who selects 58 holdings with a focus on high-growth healthcare sub-sectors such as biotechnology, medical technology, and gene therapy. While 89.00% of the fund is dedicated to healthcare, it also maintains small positions in industrials and consumer cyclical stocks. Its top holdings include Thermo Fisher Scientific (NYSE:TMO) at 6.98%, Novo Nordisk (NYSE:NVO) at 6.87%, and United Therapeutics (NASDAQ:UTHR) at 6.79%. It was launched in 2021. The fund distinguishes itself with a currency hedge and a unique pro bono structure that donates all net profits to the Susan G. Komen foundation; as of Sept. 1, 2025, these contributions totaled $350,000. Simplify Health Care ETF has paid $0.25 per share over the trailing 12 months, which, at its recent ~$38.7 share price, yields 0.60%.
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Which is the better buy
The Simplify Health Care ETF (PINK) and the State Street Health Care Select Sector SPDR ETF (XLV) are both health care exchange-traded funds (ETFs). Yet, they have very different strategic visions. Let’s see how these two funds compare to one another.
First, there’s XLV. This is the largest health care ETF, with over $41 billion in AUM, ranking it among the top 100 ETFs by AUM. In other words, XLV is the standard for an ETF covering the health care sector. The fund was founded in 1998, giving it nearly 30 years of performance history. Over its lifetime, XLV has delivered a total return of 874%, with a compound annual growth rate (CAGR) of 8.6%. This is nearly identical to the S&P, which has generated a total return of 888%, with a CAGR of 8.7% over the same 28-year period. As for fees, XLV has an expense ratio of 0.08%, making it a very affordable option. Lastly, the fund has a dividend yield of 1.6% which will appeal to income-seeking investors.
Then, there’s PINK. This fund varies in several key ways from its counterpart. For starters, PINK has a much higher expense ratio of 0.51%. However, investors should note that the fund operates on a philanthropic model, in which 100% of net management profits are donated to the Susan G. Komen Foundation. Turning to its structure, PINK is actively managed. It holds about 60 stocks, most of which are healthcare stocks. However, it does hold some retail, industrial, and consumer stocks. The fund was founded in 2021. Since then, the fund has delivered a total return of 59%, with a CAGR of 10.2%. Lastly, it has a modest dividend yield of 0.6%.
In summary, XLV is the most popular healthcare ETF. Its combination of solid long-term performance and low fees makes it tough to beat. However, for those who prefer an active management approach or are willing to pay a higher expense ratio for charitable giving, PINK is an ETF to consider.
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Jake Lerch has positions in Select Sector SPDR Trust – State Street Health Care Select Sector SPDR ETF. The Motley Fool has positions in and recommends AbbVie, Eli Lilly, Novo Nordisk, Thermo Fisher Scientific, and United Therapeutics. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
PINK vs. XLV: How Do These Two Health Care ETFs Match Up? was originally published by The Motley Fool
