Healthcare (XLV) vs Consumer Staples (XLP)
XLV (Health Care Select Sector SPDR Fund) tracks healthcare with top weights Eli Lilly ~15 percent, UnitedHealth ~9 percent, J&J ~6 percent, Merck ~5 percent, AbbVie ~5 percent, Novo Nordisk ADR (limited US exposure). XLP (Consumer Staples Select Sector SPDR Fund) tracks consumer staples.
Also known as: Healthcare (XLV) (ETF_XLV, healthcare) · Consumer Staples (XLP) (ETF_XLP, consumer staples)
Why This Comparison Matters
XLV (Health Care Select Sector SPDR Fund) tracks healthcare with top weights Eli Lilly ~15 percent, UnitedHealth ~9 percent, J&J ~6 percent, Merck ~5 percent, AbbVie ~5 percent, Novo Nordisk ADR (limited US exposure). XLP (Consumer Staples Select Sector SPDR Fund) tracks consumer staples. April 2026: XLV ~$160; XLP ~$80. Both defensive sectors. XLV leveraged to GLP-1 drug cycle (Eli Lilly Mounjaro/Zepbound, Novo Nordisk Ozempic/Wegovy). XLP pressured by GLP-1 (Mounjaro/Ozempic reducing food/beverage demand affecting MCD/SBUX/PEP/KO). The same drug cycle helps XLV and hurts XLP - clean opposing exposures.
The April 2026 Configuration
XLV ~$160; XLP ~$80. XLV/XLP ratio approximately 2.0.
XLV composition: Eli Lilly (LLY) ~15% (GLP-1 dominant); UnitedHealth (UNH) ~9% (managed care); Johnson & Johnson (JNJ) ~6% (pharma); Merck (MRK) ~5% (pharma + Keytruda); AbbVie (ABBV) ~5% (pharma); Pfizer (PFE) ~3%; Bristol-Myers (BMY) ~3%; Thermo Fisher (TMO) ~3%; Abbott (ABT) ~3%; Danaher (DHR) ~2%; Cigna ~2%; Humana ~1%; Medtronic ~1%; CVS Health ~1%.
XLP composition: Procter & Gamble ~14%; Costco ~12%; Coca-Cola ~9%; Walmart ~9%; PepsiCo ~6%.
April 2026: XLV outperforming XLP modestly. Eli Lilly +30% past 12 months on GLP-1 + obesity drug pipeline. UnitedHealth stable. Pharma/biotech selective. XLP pressured by GLP-1 affecting food/beverage; Costco + Walmart strength offsetting.
GLP-1 Driving the Divergence
GLP-1 weight-loss drugs (Ozempic, Wegovy from Novo Nordisk; Mounjaro, Zepbound from Eli Lilly) creating clean opposing sector exposure.
XLV beneficiaries. Eli Lilly: LLY stock +30% past 12 months. Mounjaro/Zepbound revenue ramp. Lilly market cap surged to $700B+ (largest healthcare). Novo Nordisk also benefits but ADR limited weight in XLV.
XLP victims. Coca-Cola, PepsiCo, McDonald's, Starbucks, Mondelez face volume headwinds as GLP-1 users consume less food/beverage. Estimated 5-15% volume reduction in some categories. PEP/KO/MDLZ/MCD pricing power offsets some impact but margins compressed.
The practical implication: GLP-1 cycle specifically widens XLV/XLP ratio. Both sectors traditionally defensive but GLP-1 mechanism creates direct transfer of consumer spending from food/beverage (XLP) to drugs (XLV).
Beyond GLP-1: Other XLV Drivers
XLV has multiple growth drivers beyond GLP-1.
Biotech innovation: Keytruda (Merck), Humira biosimilars, gene therapy, oncology pipeline.
Managed care: UnitedHealth (UNH), Humana (HUM), CVS Health/Aetna. Medicare Advantage growth.
Medical devices: Abbott, Medtronic, Boston Scientific, Stryker. Aging demographics.
Life sciences: Thermo Fisher, Danaher. Research/biotech tools.
April 2026: XLV diverse exposure. UnitedHealth stable. JNJ split (Kenvue separated). Merck Keytruda dominant in immuno-oncology. AbbVie post-Humira transition.
The practical implication: XLV/XLP captures GLP-1 transfer + defensive bid. XLV broader healthcare innovation provides additional growth tailwind beyond just GLP-1.
How the Pair Performs Through Cycles
2008-09 GFC: XLV -36%; XLP -33%. Both fell similarly.
2009-2014 recovery: XLV +120%; XLP +90%. XLV outperformed.
2017-2018: XLV +10%; XLP -5%. XLV outperformed.
2020 COVID: XLV -22%; XLP -22%. Parallel.
2020-2021 recovery: XLV +30%; XLP +20%.
2022 hiking: XLV -10%; XLP -3%. XLP outperformed (more defensive).
2023-2024 GLP-1 emergence: XLV +20% (Eli Lilly +200%); XLP +14%.
2025-2026 GLP-1 continuation + healthcare innovation: XLV strong; XLP modest gains.
Pattern: XLV outperforms during innovation cycles + GLP-1 narratives. XLP outperforms during pure rate stress (more bond proxy).
How the Pair Performs in Stress
2008-09 GFC: XLV -36%; XLP -33%. Roughly parallel.
2018 Q4: XLV -7%; XLP -10%. XLV outperformed.
2020 COVID: XLV -22%; XLP -22%. Parallel.
2022 hiking: XLV -10%; XLP -3%. XLP outperformed.
2023 SVB: XLV +0%; XLP +2%. Both stable.
2024-2026: XLV outperforming (GLP-1 + innovation).
Pattern: XLV/XLP relatively stable during pure equity stress (both defensive). Diverge during GLP-1 cycles or innovation narratives.
Volatility and Trading
XLV realized vol ~13-18%. XLP ~11-15%. Both lower than cyclicals. 60-day correlation 0.55-0.75 (positive defensive).
XLV exposure: XLV ETF or VHT (Vanguard Healthcare). XLP exposure: XLP ETF or VDC. Direct: LLY/UNH/MRK vs PG/COST/KO.
2024-2026 long XLV / short XLP gained substantially (Eli Lilly + GLP-1 narrative).
Most actionable: GLP-1 prescription growth (LLY, NVO quarterly); UnitedHealth Q1 2026 earnings; consumer staples pricing power.
Reading the Pair as a Trading Tool
XLV > XLP: GLP-1 cycle + healthcare innovation (current 2024-2026). Long XLV.
XLP > XLV: pure defensive bid. Inflation regime. Pricing power dominant.
Both fall: severe equity stress (both defensive but bond-proxy element).
April 2026: XLV outperforming. Long XLV through ETF or LLY/UNH/MRK individual names. Short XLP only viable as relative trade (XLP outright stable).
How XLV-vs-XLP Compares to Other Defensive Pairs
Vs XLU/XLP: XLU bond proxy + AI utility. XLV biotech/GLP-1.
Vs XLRE/XLP: XLRE REITs duration. XLV less rate-sensitive than XLRE.
Vs XLV/SPY: XLV defensive vs broad market.
April 2026: XLV/XLP ~2.0. GLP-1 widening.
Forward View: Watch Eli Lilly and GLP-1
XLV ~$160; XLP ~$80; XLV/XLP ~2.0. LLY +30% past 12 months. GLP-1 cycle dominant. Costco/Walmart strength offsetting GLP-1 in XLP.
Forward: Eli Lilly Mounjaro/Zepbound revenue trajectory. UnitedHealth Q1 2026 earnings. PEP/KO/MCD volume trends. Costco monthly sales.
Key watches: GLP-1 prescription growth; managed care concerns; consumer staples pricing power; healthcare innovation pipeline.
Risks: GLP-1 generic competition; Medicare Advantage reform; consumer staples GLP-1 acceleration; healthcare regulation.
The Healthcare Innovation Cycle
Healthcare innovation cycle drives XLV outperformance. Multiple drivers.
GLP-1 weight loss: Eli Lilly Mounjaro/Zepbound, Novo Nordisk Ozempic/Wegovy. Multi-year revenue growth. Estimated $50-100B market by 2030.
Oncology: Keytruda (MRK), Trodelvy (Gilead), CAR-T therapies, immuno-oncology pipeline.
Medical devices: aging demographics, robotic surgery, continuous glucose monitoring.
Gene therapy: Vertex, Bluebird Bio, novel gene editing approaches.
Managed care: Medicare Advantage growth from aging baby boomers.
XLP innovation more limited. Costco membership growth + Walmart e-commerce + private label growth (KR). Pricing power persistence.
The practical implication: XLV has stronger innovation narrative than XLP. XLV/XLP ratio expansion reflects this.
Conditional Forward Response (Tail Events)
How Consumer Staples (XLP) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in Healthcare (XLV). Computed from 1,266 aligned daily observations ending .
Following these triggers, Consumer Staples (XLP) rises 0.12% on average over the next 5 sessions, versus an unconditional baseline of +0.09%. 127 qualifying events; Consumer Staples (XLP) closed positive in 53% of them.
Following these triggers, Consumer Staples (XLP) rises 0.11% on average over the next 5 sessions, versus an unconditional baseline of +0.09%. 127 qualifying events; Consumer Staples (XLP) closed positive in 50% of them.
Past behavior in the tails is descriptive, not predictive. Mean response is the simple arithmetic mean of compounded 5-day forward returns following each trigger event; baseline is the unconditional mean across the full sample window. Edge measures the gap between the two.
90-Day Statistics
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Frequently Asked Questions
What are XLV and XLP?+
XLV (Health Care Select Sector SPDR Fund) tracks healthcare with top weights Eli Lilly (LLY) ~15% (GLP-1 dominant), UnitedHealth (UNH) ~9% (managed care), Johnson & Johnson ~6%, Merck ~5%, AbbVie ~5%, Pfizer ~3%, Bristol-Myers ~3%, Thermo Fisher ~3%, Abbott ~3%. XLP (Consumer Staples Select Sector SPDR Fund) tracks consumer staples with top weights P&G ~14%, Costco ~12%, KO ~9%, WMT ~9%, PEP ~6%. April 2026: XLV ~$160; XLP ~$80. XLV/XLP ratio ~2.0. Both defensive sectors. XLV leveraged to GLP-1 drug cycle. XLP pressured by GLP-1 (food/beverage volume headwinds).
How does GLP-1 drive the divergence?+
GLP-1 weight-loss drugs (Ozempic, Wegovy from Novo Nordisk; Mounjaro, Zepbound from Eli Lilly) creating clean opposing sector exposure. XLV beneficiaries: Eli Lilly +30% past 12 months. Mounjaro/Zepbound revenue ramp. Lilly market cap surged to $700B+ (largest healthcare). XLP victims: Coca-Cola, PepsiCo, McDonald's, Starbucks, Mondelez face volume headwinds as GLP-1 users consume less food/beverage. Estimated 5-15% volume reduction in some categories. PEP/KO/MDLZ/MCD pricing power offsets but margins compressed. GLP-1 cycle specifically widens XLV/XLP ratio. Direct transfer of consumer spending from food/beverage (XLP) to drugs (XLV).
What other XLV drivers beyond GLP-1?+
Multiple growth drivers. Biotech innovation: Keytruda (Merck), Humira biosimilars, gene therapy, oncology pipeline. Managed care: UnitedHealth, Humana, CVS Health/Aetna. Medicare Advantage growth. Medical devices: Abbott, Medtronic, Boston Scientific, Stryker. Aging demographics. Life sciences: Thermo Fisher, Danaher. Research/biotech tools. April 2026: XLV diverse exposure. UnitedHealth stable. JNJ split (Kenvue separated). Merck Keytruda dominant in immuno-oncology. AbbVie post-Humira transition. XLV/XLP captures GLP-1 transfer + defensive bid. XLV broader healthcare innovation provides additional growth tailwind beyond just GLP-1.
How does the pair perform through cycles?+
2008-09 GFC: XLV -36%; XLP -33%. Both fell similarly. 2009-2014 recovery: XLV +120%; XLP +90%. XLV outperformed. 2017-2018: XLV +10%; XLP -5%. XLV outperformed. 2020 COVID: XLV -22%; XLP -22%. Parallel. 2020-2021 recovery: XLV +30%; XLP +20%. 2022 hiking: XLV -10%; XLP -3%. XLP outperformed (more defensive). 2023-2024 GLP-1 emergence: XLV +20% (Eli Lilly +200%); XLP +14%. 2025-2026 GLP-1 continuation: XLV strong; XLP modest gains. Pattern: XLV outperforms during innovation cycles + GLP-1 narratives. XLP outperforms during pure rate stress.
How does the pair perform in stress?+
2008-09 GFC: XLV -36%; XLP -33%. Roughly parallel. 2018 Q4: XLV -7%; XLP -10%. XLV outperformed. 2020 COVID: XLV -22%; XLP -22%. Parallel. 2022 hiking: XLV -10%; XLP -3%. XLP outperformed. 2023 SVB: XLV +0%; XLP +2%. Both stable. 2024-2026: XLV outperforming (GLP-1 + innovation). Pattern: XLV/XLP relatively stable during pure equity stress (both defensive). Diverge during GLP-1 cycles or innovation narratives.
How is the pair traded?+
XLV realized vol ~13-18%. XLP ~11-15%. Both lower than cyclicals. 60-day correlation 0.55-0.75 (positive defensive). XLV exposure: XLV ETF or VHT (Vanguard Healthcare). XLP exposure: XLP ETF or VDC. Direct: LLY/UNH/MRK vs PG/COST/KO. 2024-2026 long XLV / short XLP gained substantially (Eli Lilly + GLP-1 narrative). Most actionable: GLP-1 prescription growth (LLY, NVO quarterly); UnitedHealth Q1 2026 earnings; consumer staples pricing power.
How is the pair used for trading?+
XLV > XLP: GLP-1 cycle + healthcare innovation (current 2024-2026). Long XLV. XLP > XLV: pure defensive bid. Inflation regime. Pricing power dominant. Both fall: severe equity stress (both defensive but bond-proxy element). April 2026: XLV outperforming. Long XLV through ETF or LLY/UNH/MRK individual names. Short XLP only viable as relative trade (XLP outright stable). Watch GLP-1 prescription growth, UnitedHealth quarterly, PEP/KO/MCD volume trends.
What drives the healthcare innovation cycle?+
Multiple drivers. GLP-1 weight loss: Eli Lilly Mounjaro/Zepbound, Novo Nordisk Ozempic/Wegovy. Multi-year revenue growth. Estimated $50-100B market by 2030. Oncology: Keytruda (MRK), Trodelvy (Gilead), CAR-T therapies. Medical devices: aging demographics, robotic surgery, continuous glucose monitoring. Gene therapy: Vertex, Bluebird Bio. Managed care: Medicare Advantage growth from aging boomers. XLP innovation more limited: Costco membership growth + Walmart e-commerce + private label growth (KR). Pricing power persistence. XLV has stronger innovation narrative than XLP. XLV/XLP ratio expansion reflects this.
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