Which Healthcare ETF Is the Better Buy: iShares' Global IXJ or First Trust's Biotech FBT?

iShares Global Healthcare ETF (NYSEMKT:IXJ) offers broad diversification across global healthcare sectors at a lower cost, while First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) provides a concentrated bet on biotechnology.

Healthcare investors often weigh the stability of global giants against the high-growth potential of clinical biotechnology. While the First Trust fund tracks a specialized index of biotech companies, the iShares fund captures a global basket of pharmaceutical, equipment, and service providers. This selection creates distinct risk-reward profiles for a healthcare-focused portfolio.

Snapshot (cost & size)

Metric	FBT	IXJ
Issuer	First Trust	iShares
Share price	$245.30 (as of 2026-07-20)	$98.12 (as of 2026-07-20)
Expense ratio	0.55%	0.40%
1-yr return (as of 2026-07-20)	51.60%	18.30%
Dividend yield	n/a	1.50%
Beta	0.66	0.56
AUM	$3.2B	$4.0B

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 fund is the more affordable option for healthcare investors with a 0.40% expense ratio. The First Trust fund charges a higher 0.55% fee for its specialized biotechnology focus.

Performance & risk comparison

Metric	FBT	IXJ
Max drawdown (5 yr)	(29.90%)	(18.10%)
Growth of $1,000 over 5 years (total return)	$1,471	$1,243

What's inside

iShares Global Healthcare ETF (NYSEMKT:IXJ) provides exposure to 110 global healthcare companies, resulting in a diversified portfolio that covers various industry segments. 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%. The fund provides a broader geographical reach by including major international healthcare firms alongside domestic leaders. It launched in 2001.

First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) maintains a 100% healthcare weighting but is more concentrated with only 30 holdings. It aims to replicate the performance of the NYSE Arca Biotechnology Index, focusing specifically on companies involved in clinical research and genomic development. Its largest positions include BeOne Medicines (NASDAQ:ONC) at 3.49%, Veracyte (NASDAQ:VCYT) at 3.47%, and NeoGenomics (NASDAQ:NEO) at 3.46%. Because it holds fewer stocks, individual company performance has a larger impact on the total return. It launched in 2006.

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

What this means for investors

The top holdings of these two funds tell you almost everything you need to know about what you are buying. IXJ is anchored by recognized names with decades of revenue history and dominant market positions, like AbbVie, Eli Lilly, and Johnson & Johnson. FBT's top holdings are much smaller biotechnology companies whose fortunes depend heavily on clinical trial outcomes and regulatory decisions.

Choosing FBT is a play on that distinction. FBT uses an equal-weight approach across just 30 biotech companies, meaning a breakthrough from any single holding can drive outsize gains across the whole fund. That design delivered extraordinary returns over the past year. Several holdings benefited from the surge in GLP-1 drug demand and a favorable FDA approval environment. But equal weighting also means a stumble anywhere in the portfolio lands just as hard as a win.

IXJ has a broad reach across pharmaceutical, biotech, and medical device companies worldwide at a lower cost. It therefore offers more defensive healthcare exposure for investors who want the sector's long-term growth potential without concentrating entirely in clinical-stage companies. If you’ve got a strong conviction in biotechnology's next wave of drug approvals and can accept sharp swings in both directions to capture that potential, FBT is the more exciting fund for you.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, BeOne Medicines Ag, and Eli Lilly. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.