Which Healthcare ETF Offers the Better Growth Outlook: VanEck Biotech or Invesco Pharmaceuticals?
Key Points
VanEck Biotech ETF offers a more affordable expense ratio of 0.35% compared to 0.57% for Invesco Pharmaceuticals ETF.
Invesco Pharmaceuticals ETF provides a higher trailing dividend yield and more diversified pharmaceutical exposure than the biotech-focused VanEck fund.
Invesco Pharmaceuticals ETF has historically shown a lower max drawdown and higher five-year total return than VanEck Biotech ETF.
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The Invesco Pharmaceuticals ETF (NYSEMKT:PJP) provides broader pharmaceutical exposure and a higher dividend yield, while the VanEck Biotech ETF (NASDAQ:BBH) offers a more concentrated biotechnology play with a lower expense ratio.
Healthcare investors often choose between high-growth biotechnology and established pharmaceutical giants. These two funds offer targeted exposure to these sub-sectors. While the VanEck fund focuses on companies at the cutting edge of genetic research, the Invesco fund tracks established entities involved in the broader manufacturing and distribution of traditional drugs.
Snapshot (cost & size)
| Metric | BBH | PJP |
|---|---|---|
| Issuer | VanEck | Invesco |
| Share price | $237.11 (as of 2026-08-20) | $128.89 (as of 2026-08-20) |
| Expense ratio | 0.35% | 0.57% |
| 1-yr return (as of 2026-08-20) | 42.4% | 44.2% |
| Dividend yield | 0.4% | 0.8% |
| Beta | 0.69 | 0.45 |
| AUM | $468.5M | $539.4M |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the end of trading on Aug. 20, 2026.
At 0.35%, the VanEck fund is more affordable than the 0.57% charged by the Invesco fund. For a $10,000 investment, this translates to a $22 annual difference in fees. Income investors may also note that the Invesco fund provides a higher payout.
Performance & risk comparison
| Metric | BBH | PJP |
|---|---|---|
| Max drawdown (5 yr) | (39.7%) | (17.5%) |
| Growth of $1,000 over 5 years (total return) | $1,158 | $1,665 |
What's inside
The Invesco Pharmaceuticals ETF tracks an index of 28 U.S. pharmaceutical companies involved in drug development and distribution. Its portfolio is non-diversified but covers a wider variety of businesses than pure biotech funds, primarily in healthcare. Its largest positions include Abbott Laboratories (NYSE:ABT) at 5.7%, AbbVie (NYSE:ABBV) at 5.5%, and Amgen (NASDAQ:AMGN) at 5.3%. This fund was launched in 2005. Invesco Pharmaceuticals ETF has paid $1.06 per share over the trailing 12 months, which on its recent ~$128.89 share price works out to a 0.8% yield.
In contrast, the VanEck Biotech ETF concentrates on the 25 largest U.S.-listed biotech stocks by tracking the MVIS US Listed Biotech 25 Index (the fund currently has 24 stocks in its portfolio). Its healthcare holdings are significantly more top-heavy, with top positions including Amgen at 16%, Gilead Sciences (NASDAQ:GILD) at 13%, and Vertex Pharmaceuticals (NASDAQ:VRTX) at 8.6%. This fund was launched in 2011. VanEck Biotech ETF has paid $0.96 per share over the trailing 12 months, which on its recent ~$237.11 share price works out to a 0.4% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy?
Both of these funds are highly focused ETFs seeking to profit from specific aspects of the healthcare sector. There are some similarities: both are invested in only U.S. stocks, and both are highly concentrated in their top 10, although BBH, the VanEck Pharmaceutical fund, is more so, with 72% of its assets in its top 10 compared to 50% for PJP, the Invesco Pharmaceuticals ETF.
They also have some differences investors should take into account. Mainly, PJP throws its lot in much more with small cap stocks, seeking the potential for outsize growth. The fund holds 43% of its holdings in small caps, 13% mid caps, and 43% large caps (the three do not total 100% because of rounding). By comparison, BBH is mostly mid caps, dedicating 55% if its holdings to that style, with 38% large caps, and 8% small caps (again, rounding means the figures add to more than 100%)
The concentrated focus solely on drugmakers has allowed PJP to capitalize on the GLP-1 boom, having been heavily focused on Eli Lilly & Co (NYSE:LLY) in the past (Lilly is now its seventh-largest holding at nearly 5% of the portfolio). That has provided investors in the fund with annualized 17.1% and 9.5% returns over the 3-year and 5-year time periods,, along with 7% over the past 10 years.
In recent years, the concentrated focus of BBH, has paid off for its investors. The fund has returned an annualized 9.1% over the past three years, and not-so-great 0.34% in the five-year period, and 6.4% over 10 years.
BBH is nice fund, but performance is the ultimate arbiter on which one to buy. PJP beats its rival in every longer-term time frame, making the VanEck Biotech ETF the one to buy.
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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, Amgen, Eli Lilly, Gilead Sciences, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
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