Invesco Nasdaq Biotech vs. Invesco Pharma: How Do These ETFs Stack Up?
Key Points
Invesco Nasdaq Biotechnology ETF is significantly cheaper than Invesco Pharmaceuticals ETF, with an expense ratio of 0.19% compared to 0.57%.
The pharma ETF is more concentrated with 29 holdings, whereas the biotech fund holds 251 different positions.
PJP has demonstrated better risk-adjusted historical performance with a much lower maximum drawdown over the past five years.
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The Invesco Pharmaceuticals ETF (NYSEMKT:PJP) offers concentrated exposure to U.S. drugmakers, while the Invesco Nasdaq Biotechnology ETF (NASDAQ:IBBQ) provides a broader, lower-cost gateway to the biotechnology and pharmaceutical sectors.
Both funds target the healthcare space but employ different approaches. PJP focuses on a tight group of 29 pharmaceutical giants, whereas IBBQ tracks the Nasdaq Biotechnology Index, offering exposure to a much wider array of mid- and large-cap firms.
Snapshot (cost & size)
| Metric | IBBQ | PJP |
|---|---|---|
| Issuer | Invesco | Invesco |
| Share price (as of Aug. 13, 2026) | $33.91 | $124.66 |
| Expense ratio | 0.19% | 0.57% |
| 1-year return (as of Aug. 13, 2026) | 47.4% | 41.1% |
| Dividend yield | 0.8% | 0.9% |
| Beta | 0.61 | 0.45 |
| AUM | $81 million | $512.6 million |
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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
IBBQ is the more affordable option for investors with an expense ratio of 0.19%, while PJP charges 0.57%. The ETFs currently offer similar dividend yields.
Performance & risk comparison
| Metric | IBBQ | PJP |
|---|---|---|
| Max drawdown (5 year) | (37.9%) | (17.5%) |
| Growth of $1,000 over 5 years (total return) | $1,338 | $1,598 |
What's inside
PJP concentrates its assets in 29 holdings, focusing entirely on the healthcare sector. Its largest positions include Abbott Laboratories (NYSE:ABT) at 5.78%, Amgen (NASDAQ:AMGN) at 5.59%, and AbbVie (NYSE:ABBV) at 5.27%. It was launched in 2005. The ETF has paid $1.06 per share over the trailing 12 months.
IBBQ offers broader diversification with 251 holdings, though it also maintains 100% exposure to the healthcare sector. Top holdings include Amgen at 8.7%, Vertex Pharmaceuticals (NASDAQ:VRTX) at 8.27%, and Gilead Sciences (NASDAQ:GILD) at 7.12%. It was launched in 2021. The ETF has paid $0.26 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy?
Typically, the first considerations I have when comparing ETFs are their expense ratios and returns. Regarding the latter, investors know past performance is no guarantee of future results. But all else equal, I would prefer to buy the fund that has had better long-term returns, which in this case is PJP. As far as expense ratios go, lower is obviously better. A few basis points here or there isn't going to ruin your life, but when you start seeing pretty wide gaps (0.19% for IBBQ versus 0.57% for PJP), that's where those extra basis points start to add up. (And eat at your portfolio's return.)
But for these two ETFs specifically, the bigger concern I have is their assets under management. IBBQ is super diversified, with 251 holdings, which is something I normally find attractive in an ETF. Conversely, PJP is extremely concentrated in just 29 stocks. But IBBQ is tiny, with barely $80 million in assets under management. I'd be worried about the fund's liquidity if/when I wanted to sell my shares. PJP has over $500 million in AUM.
I don't love PJP's expense ratio, but IBBQ is just so small. I think PJP is the better buy here.
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Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, Amgen, Gilead Sciences, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
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