Which Healthcare ETF Is the Better Buy: iShares’ Global IXJ or First Trust’s Biotech FBT?
Key Points
iShares Global Healthcare ETF offers a lower expense ratio and broader sector exposure than First Trust NYSE Arca Biotechnology Index Fund.
First Trust NYSE Arca Biotechnology Index Fund focuses exclusively on biotechnology while iShares Global Healthcare ETF includes pharmaceuticals and equipment.
First Trust NYSE Arca Biotechnology Index Fund has achieved higher total returns over the last five years but carries higher price volatility.
- Motley Fool Issues Rare "Total Conviction" Buy Alert ›
iShares Global Healthcare ETF (NYSEMKT:IXJ) provides broad, lower-cost exposure to global health sectors, while First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) offers a concentrated, high-conviction play on the biotechnology industry.
These funds offer distinct approaches to healthcare investing. The iShares fund tracks a diversified global index of healthcare equities across multiple sub-industries. In contrast, the First Trust fund targets a narrower slice of the market, specifically focusing on biotechnology firms to match the performance of the NYSE Arca Biotechnology Index.
Snapshot (cost & size)
| Metric | FBT | IXJ |
|---|---|---|
| Issuer | First Trust | iShares |
| Share price | $268.39 (as of 2026-10-15) | $107.21 (as of 2026-10-15) |
| Expense ratio | 0.55% | 0.38% |
| 1-yr return (as of 2026-10-15) | 43.8% | 19.5% |
| Dividend yield | N/A | 1.4% |
| Beta | 0.68 | 0.55 |
| AUM | $2.9 billion | $4.4 billion |
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.
The iShares fund is the more affordable option with an expense ratio of 0.38%, compared to 0.55% for the First Trust fund. Lower management fees can significantly influence long-term results by allowing a larger portion of returns to compound within the portfolio.
Performance & risk comparison
| Metric | FBT | IXJ |
|---|---|---|
| Max drawdown (5 yr) | (27.4%) | (18.1%) |
| Growth of $1,000 over 5 years (total return) | $1,641 | $1,362 |
What's inside
iShares Global Healthcare ETF maintains a diversified portfolio of 109 holdings, with sector weightings including Pharma, Biotech & Life Sciences at 70% and Health Care Equipment & Services at 29%. Its largest positions include Eli Lilly (NYSE:LLY) at 10.79%, Johnson & Johnson (NYSE:JNJ) at 6.58%, and Abbvie (NYSE:ABBV) at 5.40%. It launched in 2001.
First Trust NYSE Arca Biotechnology Index Fund is highly concentrated, holding only 30 positions entirely within the healthcare sector. Top holdings include Halozyme Therapeutics (NASDAQ:HALO) at 4.93%, Natera (NASDAQ:NTRA) at 4.64%, and Illumina (NASDAQ:ILMN) at 4.36%. It launched in 2006.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
Healthcare is generating more investment headlines than it has in years, driven by record dealmaking, GLP-1 drug innovation, and a wave of biotech acquisitions showing no sign of slowing. Both IXJ and FBT offer a way into that momentum, but the portfolios behind them look nothing alike.
IXJ is the more patient bet. It owns 109 healthcare companies across pharmaceuticals, medical devices, and health services worldwide, pays a modest dividend, and tends to hold up better when markets get rocky. It is the kind of fund you can own for decades without losing sleep.
FBT is built for a different kind of investor. Its 30 equal-weighted biotech names have delivered extraordinary returns recently as drug approvals and acquisition activity lifted the sector. But those same 30 companies can fall hard when clinical trials fail or investor sentiment shifts.
FBT has outperformed IXJ significantly over the past year. Whether that gap continues depends on whether the biotech cycle keeps running, something nobody can know for certain. For most long-term investors, IXJ's lower cost, income, and broader diversification make it the more dependable foundation. FBT is worth considering as a smaller, higher-conviction addition for those who believe biotech's best days are still ahead.
Should you buy stock in iShares Trust - iShares Global Healthcare ETF right now?
Before you buy stock in iShares Trust - iShares Global Healthcare ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares Global Healthcare ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $355,124!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,296,254!*
Now, it’s worth noting Stock Advisor’s total average return is 901% — a market-crushing outperformance compared to 210% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 26, 2026.
Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Eli Lilly, Illumina, and Natera. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
Recommended Articles
