ProShares S&P 500 Ex-Health Care ETF (SPXV)

The ProShares S&P 500 Ex-Health Care ETF (ticker SPXV) replicates the S&P 500 index after systematically removing every healthcare company — pharmaceuticals, biotechnology, medical devices, healthcare services, and health-information systems. The result is a fund holding the remaining 400+ components across technology, financials, industrials, consumer goods, energy, materials, real estate, and utilities. It serves investors who want broad U.S. equity exposure while intentionally underweighting or avoiding the healthcare sector.

A brief history of SPXV and sector-specific exclusion ETFs

ProShares introduced a family of “ex-sector” ETFs beginning in the early 2010s, recognising that not all investors wish to hold a generic benchmark. Some feared technology was overvalued; others wanted to tilt away from fossil fuels or financial leverage; still others preferred to exclude healthcare because they already owned a pharmaceutical-heavy portfolio elsewhere or held convictions about drug-pricing regulation. SPXV arrived as part of this product wave — a tool for implementing a strategic tilt away from an entire sector without abandoning the diversification and returns profile of the broad market.

Sector exclusion is different from sector underweighting. A traditional sector rotation or “tactical allocation” might reduce healthcare from, say, 12% of the portfolio to 8%, taking a smaller bet against it. Exclusion is a binary choice: the sector is either in the fund or it is not. Over the decades since SPXV’s launch, the healthcare sector has seen cycles of outperformance and underperformance relative to the broader index, and the fund’s return has tracked those swings, lagging when healthcare surged and outperforming when healthcare stumbled.

What is excluded

Healthcare in the S&P 500 is defined broadly and includes pharmaceutical companies (Eli Lilly, Merck, Johnson & Johnson), biotechnology firms, medical-device makers (Abbott, Medtronic), healthcare-services providers (UnitedHealth, Cigna), and health-information technology companies. In normal market conditions, healthcare makes up roughly 10–15% of the index’s market weight. Removing that percentage leaves SPXV meaningfully lighter in defensive, recession-resistant characteristics (healthcare tends to hold up well in downturns) and heavier in sectors more sensitive to economic cycles.

This tilt can matter significantly. In a market downturn, SPXV may fall harder than the S&P 500 because healthcare, which it lacks, often outperforms. In a strong economy, SPXV may gain ground because it is tilted toward cyclical sectors. The magnitude of this tracking divergence depends entirely on how much healthcare outperforms or underperforms the broader market in any given period.

Costs and composition

SPXV trades with good liquidity on NASDAQ and carries an expense ratio in line with passive index tracking, typically 0.2–0.4% per year. The fund holds 400+ constituents, preserving diversification despite the sector exclusion. It is rebalanced to stay in line with the S&P 500 Ex-Health Care index, which is reconstituted and reweighted quarterly, so holding periods spanning index reconstitution events can involve more trading activity than a plain S&P 500 fund.

An investor choosing SPXV should have a deliberate thesis for sector exclusion — either a conviction that healthcare is fairly or richly valued, or a desire to reduce overlap with existing healthcare holdings, or both. Without such a thesis, a broad S&P 500 index fund is simpler and more diversified. A reader evaluating SPXV should compare its recent returns and sector breakdown against both the full S&P 500 and healthcare-specific peers, and should study the fund’s prospectus to understand the rebalancing schedule and any tax-efficiency features the sponsor has engineered into the underlying index.