Are these the best healthcare ETFs to watch? [2025]

Watch these healthcare industry ETFs on Wall St

Data as of 10 January 2025. Source: Stake, Google, ETF.com.

*The list of healthcare ETFs mentioned is ranked by assets under management. When deciding what ETFs to feature, we analyse the company's financials, recent news, advancement in their timeline, and whether or not they are actively traded on Stake.

Decide which is the best health sector ETFs to watch in 2025

1. Health Care Select Sector SPDR Fund ($XLV)

• 780 Stake customers watching
• 1,702 orders executed on Stake

The Health Care Select Sector SPDR Fund offers rock-bottom fees combined with relatively strong performance figures. The fund’s expense ratio is a mere 0.09% and currently holds nearly $40 billion in assets.

XLV is designed to track the healthcare component of the S&P 500. Since the S&P 500 is comprised of large caps, this means that the ETF has less exposure to smaller companies than competitors. The fund’s top holdings include Eli Lilly ($LLY), Johnson & Johnson ($JNJ), and UnitedHealth ($UNH).

This year, XLV has generated a return of 3.3%. Over the past 10 years, the fund has posted annualised returns of 9.3%.

🆚 Compare stock performance of XLV vs VHT→

2. Vanguard Health Care ETF ($VHT)

• 931 Stake customers watching
• 2,495 orders executed on Stake

VHT is Vanguard’s offering in the health services ETF space, offering a traditional low-cost index approach. The fund’s expense ratio is 0.10% and currently holds $17 billion in assets.

Rather than focus solely on large-cap healthcare companies, VHT seeks to reflect the overall healthcare market, tracking the MSCI U.S. Investable Market Health Care 25/50 Index. The fund’s top holdings include Eli Lilly, UnitedHealth, and AbbVie.

VHT has posted year-to-date gains of 1% as of the writing of this article, making it one of the best-performing diversified healthcare ETFs this year. Over the past 10 years, the fund has notched annualised gains of 9.2%.

3. SPDR S&P Biotech ETF ($XBI)

• 776 Stake customers watching
• 1,798 orders executed on Stake

The SPDR S&P Biotech ETF shuns broad healthcare diversification in favour of a sectoral bet on biotechnology companies. Since biotech companies tend to be riskier endeavours engaged in proprietary drug development, this fund is typically more volatile than competitors.

XBI seeks to track the S&P Biotechnology Select Industry Index and has an expense ratio of 0.35%. Unlike many healthcare industry ETFs, XBI uses a modified equal weight mechanism, offering more diversified exposure than traditional market cap weights. The fund’s largest holdings include Natera ($NTRA), Gilead Sciences ($GILD), and Incyte ($INCY).

XBI has returned just 5.2% over the past 10 years on an annualised basis. Overall, investors should expect the biotech sector to be relatively riskier than healthcare as a whole.

💡Related: Dive into biotechnology stocks listed on the ASX→

4. iShares Biotechnology ETF ($IBB)

• 644 Stake customers watching
• 1,024 orders executed on Stake

The iShares Biotechnology ETF is another biotech sector fund. With a 0.45% expense ratio, IBB is slightly more expensive than competitor XBI.

IBB tracks the NYSE Biotechnology Index, which is a market-cap-weighted benchmark that tracks the performance of US-listed companies in the biotech space. The fund’s largest holdings are Gilead Sciences, Vertex, and Amgen.

IBB’s performance in recent years has left something to be desired. Year-to-date, this ETF has posted gains of just 1.3%. Over the past 10 years, IBB has returned 3.7% on an annualised basis, well below the broader market.  

5. iShares Global Healthcare ETF ($IXJ)

• 259 Stake customers watching
• 404 orders executed on Stake

The iShares Global Healthcare ETF offers a way to access diversified exposure to a range of global companies in the health industry. At 0.41%, the fund’s management fee is higher than many other entries on this list.

IXJ is an index fund that tracks the diversified S&P Global 1200 Healthcare Sector Index. The fund’s top holdings include drug development companies like Eli Lilly and Novo Nordisk ($NVO) as well as insurance groups like UnitedHealth.

This ETF has returned a mere 0.95% so far this year, in line with the challenges of the broader healthcare industry. Over the past 10 years, however, IXJ has generated a competitive 7.6% annualised return. 

6. iShares U.S. Healthcare ETF ($IYH)

• 121 Stake customers watching
• 116 orders executed on Stake

The iShares U.S. Healthcare ETF seeks diversified exposure to listed U.S. healthcare companies, featuring an expense ratio of 0.4%. IYH is the America-specific variant of its globally focused sister fund $IXJ.

IYH currently has $3 billion under management, making it one of the smaller medical ETFs on our list. The fund tracks a variation of the Russell 1000 healthcare index designed to ensure that the ETF remains broadly diversified even if the U.S. healthcare market becomes more concentrated. IYH’s top holdings are Eli Lilly, UnitedHealth, and Johnson & Johnson.

So far this year, IYH has returned 0.84%. Over the past 10 years, the fund has notched annualised gains of 9.1%, making it among the best-performing long-term healthcare ETFs.  

7. Fidelity MSCI Health Care Index ETF ($FHLC)

• 100 Stake customers watching
• 267 orders executed on Stake

The Fidelity MSCI Health Care Index ETF seeks broad exposure to the U.S. healthcare market. At 0.08%, the fund’s expense ratio is lower than average and currently holds $2.7 billion under management.

FHLC is designed to track a variant of the MSCI USA IMI Health Care Index that ensures the fund does not become too concentrated among one or several companies. Currently, the ETF’s top holdings are Eli Lilly, UnitedHealth, and Johnson & Johnson.

For the year to date, FHLC has gained 0.94%. Over the past 10 years, the fund has returned 9.2% on an annualised basis. 

8. ARK Genomic Revolution ETF ($ARKG)

• 7,486 Stake customers watching
• 37,728 orders executed on Stake

Unlike many of the funds on our list, the ARK Genomic Revolution ETF is actively managed, eschewing index tracking in favour of stock picking. As a result, the fund’s expense ratio is above many competitors at 0.75%.

ARKG’s investment mandate focuses on companies set to benefit from advancements in life extension and genomics research. The fund’s top holdings are Twist Bioscience ($TWST), Recursion Pharmaceuticals ($RXRX), and Crispr Therapeutics ($CRSP). In total, the fund holds positions in about 35 companies, considerably less than many of the index funds on our list.

Historically, $ARKG has not offered compelling returns, with a -17.12% one year return performance and just 3.1% annualised 10-year gains. Still, the fund could offer an attractive opportunity for investors who believe in the future of genomics research and the skill of ARK’s managers. 

🆚 Compare stock performance of ARKG vs GNOM→

9. Invesco S&P 500 Equal Weight Health Care ETF ($RSPH)

• 51 Stake customers watching
• 62 orders executed on Stake

The Invesco S&P 500 Equal Weight Health Care ETF is an index fund that utilises an equal-weight investing methodology. The fund has an expense ratio of 0.4% and total assets of $879 million.

Typically, index funds weigh their holdings by market cap, meaning that larger companies have a bigger impact on index performance. RSPH, however, attempts to weigh each company in equal proportion. The fund’s holdings include Bristol-Meyers ($BMY), Intuitive Surgical ($ISRG), and Gilead Sciences.

RSPH invests in healthcare companies in the S&P 500, meaning that it has less mid and small-cap exposure. The fund has returned 0.95% year-to-date and 8.6% on a 10-year annualised basis. 

10. VanEck Pharmaceutical ETF ($PPH)

• 98 Stake customers watching
• 114 orders executed on Stake

The VanEck Pharmaceutical ETF seeks to track the performance of U.S. pharmaceutical companies. Pharma companies design, manufacture, and sell drugs & vaccines, representing a specific subsector of the healthcare market.

$PPH has an expense ratio of 0.36% and seeks to track the performance of an index of America’s top 25 listed pharma companies. Currently, the fund’s top holdings are Eli Lilly, Novo Nordisk, and Johnson & Johnson.

This ETF has had a slow start to the year, down -0.28% YTD with a 10-year annualised return of 5.2%. It could be a good fit for investors looking for low-cost exposure to America’s pharmaceutical industry, a market that has seen substantial growth over the past few years.  

How to invest in the healthcare industry?

The main way to invest in healthcare companies is through shares listed on the Nasdaq and NYSE stock exchanges, using an online investment platform. Follow our step by step guide below:

1. Find a stock investing platform

To invest in healthcare ETFs on the U.S. stock market, you'll need to sign up to an investing platform with access to Wall St. There are several share investing platforms available, of which Stake is one.

2. Fund your account

Open an account by completing an application with your personal and financial details. Fund your account with a bank transfer, PayTo, debit card or even Apple/Google Pay.

3. Search for the company

Find the company by name or ticker symbol. It is advised to conduct your own research to ensure you are purchasing the right investment product for your individual circumstances.

4. Set a market or limit order and buy the shares

Buy on any trading day using a market order, or a limit order to delay your purchase of the asset until it reaches your desired price. You may wish to look into dollar cost averaging to spread out your risk, which smooths out buying at consistent intervals.

5. Monitor your investment

Once you own the shares, you should monitor their performance. Check your portfolio regularly to ensure your investment is aligning with your financial goals.

What is the best performing healthcare ETF?

In 2024, the best-performing healthcare ETF on our list has been the VanEck Pharmaceutical ETF ($PPH), which boasts 8.5% year-to-date returns. This performance is indicative of the expansion of U.S. pharmaceutical companies, especially amidst the growing popularity of GLP-1 drugs like Ozempic and Mounjaro.

Over the past 10 years, however, the best-performing health sector ETF has been the Health Care Select Sector SPDR Fund ($XLV). XLV has notched annualised gains of 9.3% over that time frame. Since this ETF specifically tracks healthcare companies that are part of the S&P 500, XLV’s holdings may enjoy an extra long-term boost from passive investor inflows into funds that track the broader index.

Remember, past performance is no guarantee of future returns. Just because these healthcare industry ETFs have performed well historically doesn’t guarantee they will do so in the future. What’s more, investors should weigh the performance of these funds against their volatility and drawdown metrics to determine if they make sense on a risk-adjusted basis.

List of ASX healthcare ETFs

If you’re looking to invest in healthcare ETFs through the ASX, you’re in luck. Not only are some of the ETFs we’ve discussed today listed on the exchange, but some ASX-specific funds are available too.

• iShares Global Healthcare ETF ($IXJ)

IXJ, the first ETF on our list, is available in ASX-listed shares. This fund operates an identical strategy to Wall Street-listed shares but is domiciled in Australia.

• VanEck Global Healthcare Leaders ETF($HLTH)

The HLTH ETF from VanEck is more broadly focused than the company’s Wall Street-listed PPH fund. This ETF focuses on international healthcare stocks with a 0.45% expense ratio. 70% of the fund’s exposure is to the U.S., with the rest diversified globally.

• Betashares Global Healthcare ETF ($DRUG)

Finally, the DRUG ETF offers another way to access a globally diversified pool of health service companies through the ASX. This fund has an expense ratio of 0.57% and tracks the Nasdaq Global ex-Australia Healthcare index.

Disclaimer

This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. When you invest, your capital is at risk. You should consider your own investment objectives, financial situation, particular needs. The value of your investments can go down as well as up and you may receive back less than your original investment. As always, do your own research and consider seeking appropriate financial advice before investing.

Any advice provided by Stake is of general nature only and does not take into account your specific circumstances. Trading and volume data from the Stake investing platform for reference purposes only, the investment choices of others may not be appropriate for your needs and is not a reliable indicator of performance.

Our $3 applies to trades up to $30k in value (USD for Wall St trades and AUD for ASX trades). Please refer to hellostake.com/pricing for other fees that apply.