Better Healthcare ETF: Invesco's Biotech-Focused IBBQ vs. iShares' Broad IYH
Key Points
The Invesco Nasdaq Biotechnology ETF carries a lower expense ratio and delivered higher total returns over the trailing 12 months than the iShares U.S. Healthcare ETF.
The iShares U.S. Healthcare ETF provides broader industry diversification across the medical sector, while the Invesco Nasdaq Biotechnology ETF focuses strictly on biotechnology and pharmaceuticals.
The iShares U.S. Healthcare ETF has experienced significantly lower maximum drawdowns historically and manages a much larger assets under management (AUM) total.
- 10 stocks we like better than iShares Trust - iShares U.s. Healthcare ETF ›
The Invesco Nasdaq Biotechnology ETF (NASDAQ:IBBQ) offers a lower-cost, concentrated play on biotech and pharma, while the iShares U.S. Healthcare ETF (NYSEMKT:IYH) provides broader sector exposure and a higher dividend yield.
Both funds provide targeted access to the medical sector, yet they differ significantly in scope. The Invesco fund focuses narrowly on the Nasdaq-listed biotechnology space, whereas the iShares fund casts a wider net across the entire domestic healthcare landscape, including providers and equipment manufacturers.
Snapshot (cost & size)
| Metric | IBBQ | IYH |
|---|---|---|
| Issuer | Invesco | iShares |
| Share price | $34.69 (as of 2026-09-18) | $71.17 (as of 2026-09-18) |
| Expense ratio | 0.19% | 0.37% |
| 1-yr return (as of 2026-09-18) | 44.6% | 24.4% |
| Dividend yield | 0.7% | 1.1% |
| Beta | 0.60 | 0.56 |
| AUM | $0.1 billion | $3.9 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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Invesco fund is significantly more affordable, sporting an expense ratio of 0.19% compared to the 0.37% charged by the iShares fund. Investors seeking higher immediate income may prefer the iShares fund, which offers a higher payout.
Performance & risk comparison
| Metric | IBBQ | IYH |
|---|---|---|
| Max drawdown (5 yr) | (37.2%) | (17.9%) |
| Growth of $1,000 over 5 years (total return) | $1,336 | $1,315 |
What's inside
The iShares U.S. Healthcare ETF provides exposure to 100 holdings across the healthcare and technology sectors. Its largest positions include Eli Lilly (NYSE:LLY) at 14.57%, Johnson & Johnson (NYSE:JNJ) at 10.30%, and Abbvie (NYSE:ABBV) at 7.40%. It was launched in 2000, and has paid $0.80 per share over the trailing 12 months, which on its recent ~$71.17 share price works out to a 1.1% yield.
The Invesco Nasdaq Biotechnology ETF focuses entirely on the healthcare sector with 248 individual holdings. Its top holdings include Amgen (NASDAQ:AMGN) at 8.05%, Vertex Pharmaceuticals (NASDAQ:VRTX) at 7.98%, and Gilead Sciences (NASDAQ:GILD) at 7.85%. It was launched in 2021, and has paid $0.26 per share over the trailing 12 months, which on its recent ~$34.69 share price works out to a 0.7% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
Investors looking for exposure to the healthcare industry can take two different approaches through the iShares U.S. Healthcare ETF (IYH) and the Invesco Nasdaq Biotechnology ETF (IBBQ). Deciding between the two depends on the factors that are important to your investment goals.
IBBQ is targeted toward the outsized growth potential of the biotech industry. This is the ETF for investors comfortable with a high-risk, high-reward fund. Its dividend yield is lower than IYH, but IBBQ is more about capturing gains from cutting-edge clinical trials and medical innovation, as demonstrated by its far larger one-year return. The trade-off is elevated volatility, as illustrated by the fund's greater five-year max drawdown.
IYH is for conservative investors who prioritize stability and dividend income. With over double the holdings of IBBQ, you get a more diversified fund representing both biotech and the larger healthcare sector. In exchange, the ETF lacks IBBQ's explosive upside potential, and you pay a higher expense ratio.
Should you buy stock in iShares Trust - iShares U.s. Healthcare ETF right now?
Before you buy stock in iShares Trust - iShares U.s. 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 U.s. 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 $395,625!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,397,147!*
Now, it’s worth noting Stock Advisor’s total average return is 951% — a market-crushing outperformance compared to 214% 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 September 22, 2026.
Robert Izquierdo has positions in Amgen and Johnson & Johnson. 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.
Recommended Articles
