iShares Global Healthcare ETF vs VanEck Biotech ETF: Which ETF Is Better for Profiting With Healthcare in 2026?
2026-07-23 19:30
•Brendan Coffey •The Motley Fool
•••• •••••••• Axe Capital view
Choosing Stability Over Spike in Healthcare ETFs
Between iShares Global Healthcare (IXJ) and VanEck Biotech (BBH), IXJ offers steadier, long-term gains suited for SA investors wary of volatility.
The lure of biotech’s breakneck growth seen in VanEck Biotech ETF (BBH) is tempting, especially with its 30% one-year return. But that comes with a wild ride — nearly 40% decline at worst — and a narrow US-only portfolio of 25 stocks. For South African investors exposed to rand swings (USD/ZAR), a too-concentrated bet makes timing even riskier. iShares Global Healthcare ETF (IXJ), with over 100 holdings spread globally, delivers a safer, steadier path. It has better five- and ten-year average returns and adds a cushioning 1.5% dividend yield. Plus, IXJ’s geographic diversity smooths some forex volatility, a relief for anyone dealing with rand weakness. If you prefer less heartbeat-skipping risk in healthcare while still tapping growth, IXJ fits better. Of course, if biotech breakthroughs suddenly accelerate and fund performance surges further, BBH could catch up. But for now, safer and diverse beats flashy and narrow. this is just my opinion and not financial advice
I would buy IXJ for balanced, global healthcare exposure with dividend income and trim any speculative biotech bets like BBH to manage volatility, especially given rand exchange risks.
- IXJ
- BBH
- USD/ZAR
- Biotech sector breakthroughs boosting BBH unexpectedly
- Rand strengthening reducing IXJ rand-hedge appeal
7/10
The article compares two healthcare-focused ETFs: iShares Global Healthcare ETF (IXJ) with 110 holdings offering global diversification and lower volatility, versus VanEck Biotech ETF (BBH) with 25 concentrated biotech positions delivering higher short-term returns but greater drawdown risk. IXJ is recommended for its superior long-term performance, geographic diversity, and stability despite BBH's impressive 30.8% one-year return.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Brendan Coffey
Categories: Rates, Equities, Capital Returns, Healthcare
Tickers: IXJ, BBH, LLY, JNJ, ABBV, AMGN, GILD, VRTX
Sentiment: Positive - Recommended as the better choice due to broader diversification (110 holdings), lower maximum drawdown (18.1%), superior 5-year and 10-year returns (4.9% and 8.5% annualized), higher dividend yield (1.5%), and more stable global exposure across developed and emerging markets. Offers strong short-term performance (30.8% 1-year return) and better 3-year returns (9.8%), but carries significant drawbacks including high volatility (39.9% maximum drawdown), concentrated portfolio (25 holdings), U.S.-only exposure, and weaker long-term 5-year performance (0.6% annualized).
Keywords: healthcare ETF, biotech ETF, portfolio diversification, dividend yield, volatility, long-term returns, ETF comparison
Insights:
- IXJ: Positive: Recommended as the better choice due to broader diversification (110 holdings), lower maximum drawdown (18.1%), superior 5-year and 10-year returns (4.9% and 8.5% annualized), higher dividend yield (1.5%), and more stable global exposure across developed and emerging markets.
- BBH: Neutral: Offers strong short-term performance (30.8% 1-year return) and better 3-year returns (9.8%), but carries significant drawbacks including high volatility (39.9% maximum drawdown), concentrated portfolio (25 holdings), U.S.-only exposure, and weaker long-term 5-year performance (0.6% annualized).
- LLY: Neutral: Mentioned as a major holding (10.9%) in IXJ; no specific performance commentary provided in the article.