Vanguard Health Care ETF vs Simplify Health Care ETF

Dave Kovaleski, The Motley Fool

Tue, September 1, 2026 at 10:32 PM GMT+3 4 min read

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Vanguard Health Care ETF (NYSEMKT:VHT) offers broad-market healthcare exposure at a minimal cost, whereas Simplify Health Care ETF (NYSEMKT:PINK) provides an active strategy focused on innovation while donating its profits to charity.

Healthcare investors must often choose between the stability of a cap-weighted index and the potential of active management. While the Vanguard fund tracks a wide benchmark of domestic healthcare stocks, the Simplify fund seeks capital appreciation through a concentrated, expert-led portfolio targeting biotechnology and medical technology breakthroughs.

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.

Vanguard Health Care ETF is the more affordable choice with an expense ratio of 0.09%, which is substantially lower than the 0.51% charged by Simplify Health Care ETF. The Vanguard fund also offers a higher payout, yielding 1.5% compared to 0.6% for the Simplify fund.

Performance & risk comparison

What's inside

Vanguard Health Care ETF holds 411 positions, with its largest positions including Eli Lilly & Co (NYSE:LLY) at 13.40%, Johnson & Johnson (NYSE:JNJ) at 8.84%, and AbbVie Inc (NYSE:ABBV) at 6.45%. It is primarily concentrated in healthcare at 99%. Launched in 2004, the fund has paid $4.72 per share over the trailing 12 months, which on its recent ~$323.7 share price works out to a 1.5% yield.

Simplify Health Care ETF maintains 58 holdings and concentrates 87% of the portfolio in healthcare, followed by 7% in industrials. Top holdings include Eli Lilly & Co at 10.43%, Humana Inc (NYSE:HUM) at 6.91%, and Purecycle Technologies Inc (NASDAQ:PCT) at 6.25%. Launched in 2021, the fund has paid $0.25 per share over the trailing 12 months, which on its recent ~$39.8 share price works out to a 0.6% yield. It features a currency hedge and donates all net profits to breast cancer research.

For more guidance on ETF investing, check out the full guide at this link.

Which looks like the better buy

The healthcare sector has been one of the better performers over the past year. Stocks in the sector have had an average return of about 10% year-to-date and 25% over the past 12 months.

These are two good options to tap into the sector, yet they are very different. The Vanguard fund has a lower expense ratio, is far more diversified, has a higher distribution yield, and has been a better performer this year, up 12% year-to-date compared to the Simplify ETF, which is up about 8%.

The Simplify ETF is far more concentrated, but it has better longer-term returns. It beats the Vanguard ETF in one-, three-, and five-year average annualized returns.

Also, it is a pro bono fund, which means all of its net profits get donated to the Susan G. Komen Foundation for breast cancer research. That's a nice added benefit, even if the fund didn't perform so well. The Simplify ETF would be my investment choice among the two.

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Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie and Eli Lilly. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Vanguard Health Care ETF vs Simplify Health Care ETF was originally published by The Motley Fool