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XLV vs. JPST: What’s The Difference?

The Health Care Select Sector SPDR Fund (XLV) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. XLV is a SPDR State Street Global Advisors Health fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between XLV and JPST? And which fund is better?

The expense ratio of XLV is 0.06 percentage points lower than JPST’s (0.12% vs. 0.18%). XLV also has a high exposure to the healthcare sector while JPST is mostly comprised of A bonds. Overall, XLV has provided higher returns than JPST over the past ten years.

In this article, we’ll compare XLV vs. JPST. We’ll look at fund composition and performance, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss XLV’s and JPST’s industry exposure, portfolio growth, and holdings and examine how these affect their overall returns.

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Summary

XLVJPST
NameHealth Care Select Sector SPDR FundJPMorgan Ultra-Short Income ETF
CategoryHealthUltrashort Bond
IssuerSPDR State Street Global AdvisorsJPMorgan
AUM27.88B17.32B
Avg. Return15.02%2.57%
Div. Yield1.4%0.94%
Expense Ratio0.12%0.18%

The Health Care Select Sector SPDR Fund (XLV) is a Health fund that is issued by SPDR State Street Global Advisors. It currently has 27.88B total assets under management and has yielded an average annual return of 15.02% over the past 10 years. The fund has a dividend yield of 1.4% with an expense ratio of 0.12%.

The JPMorgan Ultra-Short Income ETF (JPST) is a Ultrashort Bond fund that is issued by JPMorgan. It currently has 17.32B total assets under management and has yielded an average annual return of 2.57% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.18%.

XLV’s dividend yield is 0.46% higher than that of JPST (1.4% vs. 0.94%). Also, XLV yielded on average 12.45% more per year over the past decade (15.02% vs. 2.57%). The expense ratio of XLV is 0.06 percentage points lower than JPST’s (0.12% vs. 0.18%).

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Fund Composition

Holdings

XLV - Holdings

XLV HoldingsWeight
Johnson & Johnson9.19%
UnitedHealth Group Inc8.01%
Pfizer Inc4.64%
Abbott Laboratories4.36%
AbbVie Inc4.21%
Thermo Fisher Scientific Inc4.2%
Merck & Co Inc4.17%
Eli Lilly and Co3.87%
Danaher Corp3.61%
Medtronic PLC3.54%

XLV’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and AbbVie Inc at 9.19%, 8.01%, 4.64%, 4.36%, and 4.21%.

Thermo Fisher Scientific Inc (4.2%), Merck & Co Inc (4.17%), and Eli Lilly and Co (3.87%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the XLV’s holdings at 3.61% and 3.54%.

JPST - Holdings

JPST Bond SectorsWeight
A39.21%
BBB36.75%
AAA14.9%
AA9.14%
Others0.0%
Below B0.0%
B0.0%
BB0.0%
US Government0.0%

JPST’s Top Bond Sectors are ratings of A, BBB, AAA, AA, and Others at 39.21%, 36.75%, 14.9%, 9.14%, and 0.0%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.

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Risk Analysis

XLVJPST
Mean Return1.270
R-squared58.190
Std. Deviation12.940
Alpha7.750
Beta0.70
Sharpe Ratio1.130
Treynor Ratio21.10

The Health Care Select Sector SPDR Fund (XLV) has a Treynor Ratio of 21.1 with a Sharpe Ratio of 1.13 and a Mean Return of 1.27. Its Alpha is 7.75 while XLV’s R-squared is 58.19. Furthermore, the fund has a Beta of 0.7 and a Standard Deviation of 12.94.

The JPMorgan Ultra-Short Income ETF (JPST) has a Sharpe Ratio of 0 with a Beta of 0 and a Alpha of 0. Its Treynor Ratio is 0 while JPST’s Mean Return is 0. Furthermore, the fund has a R-squared of 0 and a Standard Deviation of 0.

XLV’s Mean Return is 1.27 points higher than that of JPST and its R-squared is 58.19 points higher. With a Standard Deviation of 12.94, XLV is slightly more volatile than JPST. The Alpha and Beta of XLV are 7.75 points higher and 0.70 points higher than JPST’s Alpha and Beta.

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Performance

Annual Returns

XLV vs. JPST - Annual Returns

YearXLVJPST
202013.33%2.17%
201920.63%3.36%
20186.3%2.19%
201721.7%0.0%
2016-2.83%0.0%
20156.82%0.0%
201425.17%0.0%
201341.24%0.0%
201217.56%0.0%
201112.44%0.0%
20102.91%0.0%

XLV had its best year in 2013 with an annual return of 41.24%. XLV’s worst year over the past decade yielded -2.83% and occurred in 2016. In most years the Health Care Select Sector SPDR Fund provided moderate returns such as in 2011, 2020, and 2012 where annual returns amounted to 12.44%, 13.33%, and 17.56% respectively.

The year 2019 was the strongest year for JPST, returning 3.36% on an annual basis. The poorest year for JPST in the last ten years was 2017, with a yield of 0.0%. Most years the JPMorgan Ultra-Short Income ETF has given investors modest returns, such as in 2013, 2012, and 2011, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

XLV vs. JPST - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
XLV$10,000$14,53215.02%
JPST$10,000$10,7912.57%

A $10,000 investment in XLV would have resulted in a final balance of $14,532. This is a profit of $4,532 over 3 years and amounts to a compound annual growth rate (CAGR) of 15.02%.

With a $10,000 investment in JPST, the end total would have been $10,791. This equates to a $791 profit over 3 years and a compound annual growth rate (CAGR) of 2.57%.

XLV’s CAGR is 12.45 percentage points higher than that of JPST and as a result, would have yielded $3,741 more on a $10,000 investment. Thus, XLV outperformed JPST by 12.45% annually.


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