iShares Global Healthcare ETF vs VanEck Biotech ETF: Which ETF Is Better for Profiting With Healthcare in 2026?

The iShares Global Healthcare ETF (NYSEMKT:IXJ) offers broad, global exposure and lower historical volatility, while the VanEck Biotech ETF (NASDAQ:BBH) provides a concentrated, high-growth play on specialized biotechnology innovators.

Investors deciding between these two healthcare-focused funds must choose between industry-wide stability and sub-sector volatility. One strategy casts a global net across pharmaceuticals, medical equipment, and services, while the other concentrates exclusively on the 25 largest biotechnology companies listed on U.S. exchanges.

Snapshot (cost & size)

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 close of trading on July 20.

The VanEck fund is slightly more cost-effective for long-term holders with its 0.35% expense ratio. While the cost difference is minor, income-seeking investors may prefer the iShares fund, which provides a 1.5% distribution yield that triples the 0.5% payout offered by its biotechnology peer.

Performance & risk comparison

What's inside

iShares Global Healthcare ETF provides exposure to 110 pharmaceutical, biotechnology, and medical device companies across both developed and emerging markets. This global reach offers a broader lens than sub-sector funds. Its largest positions include Eli Lilly & Co (NYSE:LLY) at 10.9%, Johnson & Johnson (NYSE:JNJ) at 7%, and Abbvie (NYSE:ABBV) at 5.1%. It was launched in 2001. iShares Global Healthcare ETF has paid $1.44 per share over the trailing 12 months, which on its recent ~$98.12 share price works out to a 1.50% yield.

VanEck Biotech ETF focuses specifically on the U.S.-listed biotechnology segment, following an index of corporations involved in genetic research and diagnostic technologies. It holds 25 companies, creating a high-concentration portfolio where top holdings include Amgen (NASDAQ:AMGN) at 15.1%, Gilead Sciences (NASDAQ:GILD) at 12.8%, and Vertex Pharmaceuticals (NASDAQ:VRTX) at 9.1%. It was launched in 2011. The VanEck Biotech ETF has paid $0.96 per share over the trailing 12 months, which on its recent ~$202.29 share price works out to a 0.5% yield.

Which fund is the better buy?

Both these funds offer access to pharmaceutical companies at a similar expense ratio. But there are differences investors should consider when deciding whether to invest in one or the other.

IXJ, the iShares ETF, provides international exposure, whereas the VanEck offering does not. IXJ is about three-quarters focused on U.S. stocks, with nearly all the balance in developed, non-U.S. markets (1% of its holdings are in emerging markets).

The VanEck fund, BBH, is all U.S. stocks. But BBH offers its own type of diversification IXJ doesn’t, mainly market cap weightings. BBH holds 8% of its portfolio in small caps. IXJ is just 1% in small caps despite holding more than five times as many equities in its strategy. Fully 80% of IXJ’s portfolio is in large-cap stocks. BBH is 38% in large caps and 54% in mid caps.

To IXJ’s benefit, its geographic diversity and portfolio size mitigate the fund against huge drawdowns, something that is a strike against BBH. But a drawdown isn’t a loss unless an investor has to sell. Investment returns over the long term one among the best ways to judge an ETF.

In addition to its superior 1-year return, as listed in an earlier table, BBH has bested IXJ with annualized returns of 9.8% to 6.6% over the 3-year period. Yet IXJ is much better in the past five years, at 4.9% to 0.6% for BBH. Over the past 10 years, IXJ has won at 8.5% to 7.6%.

These are two well-constructed funds that take a different approach to the biotech sector. Individual investors may have their own preferences, but in this case, going with the fund with a more diverse stock portfolio, fewer drawdowns, and better long-term returns is the way to go. Go with IXJ.

For more guidance on ETF investing, check out the full guide at this link.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Amgen, Eli Lilly, Gilead Sciences, and Vertex Pharmaceuticals. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.