

Two health care ETFs track the same sector but own very different slices of it, and for retirees building a portfolio, that gap in biotech exposure and concentration could matter more than the nearly identical returns suggest.

State Street Health Care Select Sector SPDR ETF focuses exclusively on S&P 500 healthcare components, leading to a highly concentrated portfolio. Fidelity MSCI Health Care Index ETF provides broader industry exposure and reaches deeper into mid-cap and small-cap segments.


Fidelity MSCI Health Care Index ETF offers a significantly lower expense ratio of 0.08% compared to 0.44% for the iShares Biotechnology ETF. iShares Biotechnology ETF is more concentrated, with 87% of its portfolio in biotechnology stocks.

One offers broad diversification at 0.08% cost, while the other targets concentrated biotech growth with higher volatility.

Rockland Trust Co. bought a new position in shares of Fidelity MSCI Health Care Index ETF (NYSEARCA:FHLC) in the third quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor bought 28,319 shares of the company's stock, valued at approximately $2,314,000. Rockland Trust Co.

The Fidelity MSCI Health Care Index ETF offers a significantly lower expense ratio and a more diversified portfolio than the State Street SPDR S&P Biotech ETF. The State Street SPDR S&P Biotech ETF experienced a much deeper maximum drawdown over the last five years but outperformed on a 1-year total return basis.

FHLC features a much lower expense ratio of 0.08% compared to 0.35% for BBH. BBH is a concentrated portfolio of just 26 stocks, while FHLC holds around 350 companies.