iShares Global Healthcare ETF (NYSEMKT:IXJ) provides broad international exposure and market-cap weighting, whereas Invesco S&P 500 Equal Weight Health Care ETF (NYSEMKT:RSPH) focuses on U.S. large caps with a specific equal-weighting mandate that reduces concentration risk.
Both funds offer targeted exposure to the healthcare sector but differ significantly in their geographic scope and construction. While RSPH levels the playing field among 60 domestic giants, IXJ captures 110 global leaders, including major European pharmaceutical companies. With $4.1 billion in assets under management (AUM), the iShares fund offers substantially higher liquidity than its $734.1 million Invesco counterpart.
Snapshot (cost & size)
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12Â months. Dividend yield is the trailing-12-month distribution yield.
Both ETFs carry an identical 0.40% expense ratio, which is relatively efficient for specialized sector funds. However, the iShares fund offers a notably higher dividend yield of 1.50%, providing more income for yield-seekers than the 0.70% payout provided by the Invesco fund.
Performance & risk comparison
The iShares Global Healthcare ETF provides exposure to 110 global healthcare stocks, capturing sector leaders across international markets. Its largest positions include Eli Lilly at 10.6%, Johnson & Johnson at 7.1%, and AbbVie at 5%. This fund was launched in 2001. It has paid $1.44 per share over the trailing 12 months, which on its recent ~$99.21 share price works out to a 1.50% yield.
In contrast, the Invesco S&P 500 Equal Weight Health Care ETF tracks the S&P 500 Equal Weight Health Care Index and holds 60 stocks. The fund employs an equal-weighting strategy that is adjusted on a quarterly basis. Its largest positions include Moderna at 2.35%, Bio-Techne at 2.2%, and Charles River Laboratories International at 2%. This fund was launched in 2006. It has paid $0.23 per share over the trailing 12 months, which on its recent ~$33.98 share price works out to a 0.70% yield.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
There are a lot of different ways to invest in healthcare stocks, but exchange-traded funds afford investors the ability to hold top-performing companies in various subsectors without the added complexity of following the clinical trial results or earnings reports of dozens or hundreds of individual companies.
Invesco’s equal-weight healthcare fund offers further diversification with its weighting approach, which rebalances its portfolio quarterly to avoid concentration risk. This means its sector breakdown is more equal than the iShares fund’s, with about 30% in healthcare equipment and supplies, 25% in healthcare providers and services, 18% in life sciences tools and services, 15% in biotech, and 11% in pharmaceuticals. This method may smooth out the volatility that can come with investing in pharmaceuticals and biotech stocks, which can swing widely on clinical trial results and drug sales. For investors who are more interested in the defensive side of healthcare investing — like healthcare providers and services — this may be an attractive option.
The iShares fund offers a more straightforward approach, letting its leaders drive the majority of the gains. This introduces concentration risk, with pharma giant Eli Lilly alone making up more than 10% of the 110-company fund. But it also means that its winners keep winning, potentially offering higher returns over the long term. Its larger portfolio, higher total assets under management, and higher dividend yield likely make it the more compelling choice for most healthcare investors.
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Sarah Sidlow has positions in Johnson & Johnson. The Motley Fool has positions in and recommends AbbVie, Eli Lilly, and Moderna. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
Healthcare Investing in 2026: iShares Global Healthcare ETF Outperforms Invesco Health Care ETF was originally published by The Motley Fool
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