Choosing between iShares Global Healthcare ETF (NYSEMKT:IXJ) and iShares Biotechnology ETF (NASDAQ:IBB) involves a trade-off between broad healthcare stability and the high-growth, high-volatility nature of biotechnology.
For investors seeking to navigate the healthcare sector, understanding whether to prioritize broad-market stability or sub-sector growth is essential for portfolio construction. While both utilize a passive strategy, their underlying benchmarks result in different experiences regarding price swings and income potential for long-term holders.
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.
The iShares Global Healthcare ETF is slightly more affordable with a 0.40% expense ratio. It also provides a considerably higher dividend payout compared to the biotech-focused alternative, making it more attractive for income-oriented healthcare investors.
Performance & risk comparison
What’s inside
The iShares Global Healthcare ETF provides broad exposure across the international healthcare landscape, encompassing pharmaceuticals, healthcare equipment, and managed care providers. Its portfolio contains 110 holdings, and its largest positions include Eli Lilly (NYSE:LLY) at 10.66%, Johnson & Johnson (NYSE:JNJ) at 6.96%, and AbbVie (NYSE:ABBV) at 5.14%. This fund was launched in 2001. The 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.
By contrast, the iShares Biotechnology ETF focuses exclusively on the U.S. biotechnology sub-sector, which is often characterized by intensive research and development. It holds 248 companies, and its top holdings include Amgen (NASDAQ:AMGN) at 7.97%, Vertex Pharmaceuticals (NASDAQ:VRTX) at 7.95%, and Gilead Sciences (NASDAQ:GILD) at 7.32%. This fund was also launched in 2001. The iShares Biotechnology ETF has paid $0.41 per share over the trailing 12 months, which on its recent ~$186.53 share price works out to a 0.20% yield.