It has happened. The Health Care Select Sector SPDR (NYSEArca: XLV) has usurped the Energy Select Sector SPDR (NYSEArca: XLE) for the title of third-largest U.S. sector ETF.
In early November, ETF Trends called attention to the scenario, noting on Nov. 4 that XLE was home to about $8.4 billion in assets under management compared to $7.9 billion for XLV. [Bronze Medal Race for Sector ETF Supremacy]
Both ETFs grew over the course of November, but XLV grew faster. As of Nov. 27, XLE had $8.56 billion in AUM compared to $8.82 billion for XLV, according to State Street data.
XLV has been outpacing XLE in terms of inflows all year and investors have been rewarded for their faith in the health care fund. Prior to moving past XLE for third place among sector ETFs in terms of size, XLV nudged past the Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) to wrest the crown of 2013’s top-performing SPDR. XLV is up 40.4% this year compared to a 39.6% gain for XLY.
On the other hand, XLE is up an S&P 500-lagging 22.7%, a performance that means the largest equity-based energy ETF is the third-worst of the nine sector SPDRs this year.
Both XLV and XLE are heavy on Dow components. In the case of XLE, the ETF allocates 30% of its weight to Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX). XLV allocates about 29% of its weight to Johnson & Johnson (NYSE: JNJ), Pfizer and Merck (NYSE: MRK).