Which Healthcare ETF Is the Better Buy: Invesco’s Broad RSPH or First Trust’s Biotech FBT?
Key Points
First Trust NYSE Arca Biotechnology Index Fund has delivered significantly higher 1-year total returns but with greater volatility and a deeper maximum drawdown.
Invesco S&P 500 Equal Weight Health Care ETF provides broader sector coverage, whereas the First Trust fund is a concentrated play on 30 biotechnology firms.
Invesco S&P 500 Equal Weight Health Care ETF carries a lower expense ratio.
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Invesco S&P 500 Equal Weight Health Care ETF (NYSEMKT:RSPH) offers broad healthcare exposure at a lower cost, while First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) provides a more concentrated biotechnology focus.
Investors looking for healthcare exposure face a choice between the narrow, high-octane world of biotechnology and the broader healthcare sector. While the First Trust fund tracks a specific biotechnology index, RSPH covers the entire healthcare space within the S&P 500, using an equal-weighting strategy to mitigate concentration risk.
Snapshot (cost & size)
| Metric | FBT | RSPH |
|---|---|---|
| Issuer | First Trust | Invesco |
| Share price | $265.40 (as of 2026-10-09) | $37.59 (as of 2026-10-09) |
| Expense ratio | 0.55% | 0.4% |
| 1-yr return (as of 2026-10-26) | 43.3% | 28.6% |
| Dividend yield | N/A | 0.6% |
| Beta | 0.68 | 0.78 |
| AUM | $2.9 billion | $0.9 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 Invesco fund is the more affordable option with an expense ratio of 0.4%. In contrast, the First Trust fund charges 0.55% annually to manage its specialized biotechnology portfolio.
Performance & risk comparison
| Metric | FBT | RSPH |
|---|---|---|
| Max drawdown (5 yr) | (27.4%) | (21.9%) |
| Growth of $1,000 over 5 years (total return) | $1,633 | $1,315 |
What's inside
The Invesco fund aims to track the S&P 500 Equal Weight Health Care Index by allocating at least 90% of assets to its constituent stocks. It allocates 98% of its assets to healthcare and 2% to technology stocks. It holds 61 positions, utilizing an equal-weight strategy that limits the influence of any single company. Its largest positions include Moderna (NASDAQ:MRNA) at 2.67%, Illumina (NASDAQ:ILMN) at 2.18%, and Revvity (NYSE:PKI) at 2.00%. The fund was launched in 2006.
The First Trust fund is designed to reflect the price movements of the NYSE Arca Biotechnology Index. It maintains a 100% concentration in healthcare, specifically targeting the biotechnology sub-sector. It holds a more concentrated portfolio of 30 stocks. Its largest positions include Natera (NASDAQ:NTRA) at 4.65%, Illumina at 4.58%, and Halozyme Therapeutics (NASDAQ:HALO) at 4.54%. The fund was launched in 2006.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
Healthcare has been generating strong returns across the board recently, but not every part of the sector has moved at the same pace. Biotech has been the real winner during this run. As a result, FBT has been one of the standout performers of the past year, delivering roughly double the returns of RSPH as biotech's combination of drug approvals and acquisition activity lit up the sector.
Both funds use an equal-weight approach, which means no single company dominates the portfolio. That is where the similarity ends. RSPH spreads its bets across 60 established S&P 500 healthcare names, while FBT concentrates in just 30 biotech companies, where a single FDA approval or acquisition can move the whole fund meaningfully.
RSPH charges less than FBT and has held up better during market downturns. For investors who want steady healthcare exposure without the stomach for biotech's sharp swings, RSPH is the more dependable choice. FBT is built for those who believe the biotech cycle still has further to run and can ride out the volatility that comes with owning just 30 concentrated positions.
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Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Illumina, Moderna, and Natera. The Motley Fool has a disclosure policy.
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