Does Fidelity or iShares Have the Better Healthcare ETF For Investors Seeking Broad Exposure?

Brendan Coffey, The Motley Fool

Wed, September 16, 2026 at 10:23 PM GMT+3 5 min read

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The iShares Global Healthcare ETF (NYSEMKT:IXJ) offers worldwide exposure at a higher cost, while Fidelity MSCI Health Care Index ETF (NYSEMKT:FHLC) provides a low-cost, U.S.-centric play on the healthcare sector.

Investors looking for stability often turn to healthcare for its defensive qualities. Both funds offer broad exposure to pharmaceutical, biotech, and medical device companies. However, the choice between them involves weighing geographic reach against the drag of management fees and recent performance trends.

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 as of the close of trading on Sept. 10, 2026.

Fidelity MSCI Health Care Index ETF is significantly more affordable with an expense ratio of 0.08%. The iShares Global Healthcare ETF charges 0.38%, though it offers a slightly higher payout for income-seeking investors.

Performance & risk comparison

What's inside

The iShares Global Healthcare ETF provides broad access to healthcare equities worldwide. Its sector exposure is dominated by healthcare at 99%, with technology at 1%. Its largest positions include Eli Lilly & Co (NYSE:LLY) at 10%, Johnson & Johnson (NYSE:JNJ) at 7.%, and Abbvie (NYSE:ABBV) at 4.9%. The fund holds 110 stocks and was launched in 2001. iShares Global Healthcare ETF has paid $1.44 per share over the trailing 12 months, which on its recent ~$100.9 share price works out to a 1.4% yield.

Fidelity MSCI Health Care Index ETF tracks the MSCI USA IMI Health Care Index, resulting in a heavier focus on domestic markets. Similar to its peer, it allocates more than 99% to healthcare and less than 1% to financial services. Its top holdings include Eli Lilly & Co at 12.8%, Johnson & Johnson at 8.8%, and AbbVie at 6.2%. It is more diversified by count with 343 holdings and was launched in 2013. Fidelity MSCI Health Care Index ETF has paid $1.02 per share over the trailing 12 months, which on its recent ~$80.5 share price works out to a 1.3% yield.

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

Which looks like the better buy?

Both of these ETFs offer diversified exposure to healthcare, allowing investors to potentially reap the benefits of pharmaceutical advances along with the broader and more defensive healthcare stocks such as insurers, hospital groups, and providers of medical suppliers and technology.

Still, these two funds have enough differences that investors would do well to drill down deeper into their structure.

The iShares Global Health Care ETF, IXJ, is more geographically diverse, with 26% of its assets held in developed world, not U.S., stocks, and about 1% in emerging markets equities. The balance, of course, of about 73% is in the U.S.

It's primarily a large cap fund, with 80% of its holdings in large caps, 19% in mid caps, and 1% in small caps. So this fund essentially owns the most established equities in the regions it covers. It has about 46% of its assets dedicated to its top 10 holdings -- we prefer to see more diversity throughout oa portfolio, but it's not so concentrated as to be a concern.

Similarly, the Fidelity healthcare fund, FHLC, has about 52% of its assets in its top 10. Not ideal, but not a red flag. Geographically, FHLC focuses just on U.S. equities, but offers better style diversification through them. Large caps account for 66% of the portfolio, with 24% in mid caps and 11% in small caps. (The amounts exceed 100% due to rounding).

The true differentiator is performance. FHLC has given investors 11.1%, 5.6%, and 10.8% over the 3-, 5-, and 10-year periods, respectively. That beats IXJ in every period. IXJ has returned annualized gains of 8.6% in the past three years, 4.8% over five years, and 9.1% over the 10-year look-back.

For those looking for healthcare exposure through a brand-name fund company, FHLC is the hands down choice over IXJ given its performance record and low expenses.

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Brendan Coffey 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.

Does Fidelity or iShares Have the Better Healthcare ETF For Investors Seeking Broad Exposure? was originally published by The Motley Fool