Last year, the Health Care Select Sector SPDR (NYSEArca: XLV) gained 41.4%, a performance that was good enough to make it the third-best of the nine sector SPDR ETFs.
With a run like that, XLV may not need much more praise, but give the ETF some credit. It is one of just two sector SPDRs, the Utilities Select Sector SPDR (NYSEArca: XLU) is the other, that has turned in a positive year-to-date performance.
It is just one day, but when U.S. stocks rallied Thursday, investors rushed to XLV, sending the ETF higher on volume that was 57% above the three-month trailing average. XLV also lived up to its reputation as one of the best SPDRs to own in the month of January despite the fact that heading into Thursday’s session, just one of 30 Dow stocks were higher on the year. [Two Sector ETFs for January]
That is significant because Dow components Johnson & Johnson (NYSE: JNJ) and Pfizer combine for 21% of XLV’s weight. Merck (NYSE: MRK), the one Dow stock higher on the year, is XLV’s third-largest holding with a weight of 7.1%.
Although J&J and Pfizer have struggled, pharmaceuticals stocks, broadly speaking, have been solid performers again this year, bolstering XLV and pharma-specific ETFs like the Market Vectors Pharmaceutical ETF (NYSEArca: PPH) and the SPDR Pharmaceuticals ETF (NYSEArca: XPH) along the way. [Fun With Pharma ETFs]