Why are healthcare stocks attractive in volatile markets?

Because demand for healthcare and drugs remains steady regardless of economic conditions, making the sector defensive and less affected by volatility.

What is the difference between XLV and XBI?

XLV invests in large diversified healthcare companies, while XBI focuses on small to mid-cap biotech firms with higher growth potential and volatility.

3 Healthcare ETFs to Own in a Choppy Stock Market

In a choppy market, healthcare stocks are attractive. These three funds, covering the broader sector, drugmakers, and biotechs, are worth a look.

July 6, 2026

2 min read

Source: Barrons.com

Amid current market volatility, investors are turning to defensive sectors like healthcare. According to a report from Barron's, three exchange-traded funds (ETFs) stand out as attractive options for investors seeking relative stability and potential returns.

The Proposed Funds

1. Health Care Select Sector SPDR Fund (XLV)

This fund focuses on large-cap U.S. healthcare companies such as UnitedHealth Group and Johnson & Johnson. It offers broad sector exposure with low expense ratios.

2. iShares U.S. Pharmaceuticals ETF (IHE)

This fund primarily invests in major pharmaceutical companies, including Eli Lilly. It is suitable for investors wanting concentrated exposure to pharma without significant small-cap risk.

3. SPDR S&P Biotech ETF (XBI)

Covering biotechnology companies, this fund is more volatile but offers higher growth potential. Suitable for risk-tolerant investors.

Context

Healthcare stocks tend to be less sensitive to macroeconomic cycles, making them a defensive choice in times of uncertainty. Demand for healthcare services and drugs remains steady regardless of economic conditions.

What This Means for Investors

These ETFs can provide diversification and a hedge against volatility, but investors should assess their risk tolerance and investment goals before making any decisions.

Frequently Asked Questions

The Health Care Select Sector SPDR Fund (XLV) for broad exposure, iShares U.S. Pharmaceuticals ETF (IHE) for pharma, and SPDR S&P Biotech ETF (XBI) for biotech.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.