Better Healthcare ETF: Invesco's Biotech-Focused IBBQ vs. iShares' Broad IYH

The Invesco Nasdaq Biotechnology ETF (NASDAQ:IBBQ) offers a lower-cost, concentrated play on biotech and pharma, while the iShares U.S. Healthcare ETF (NYSEMKT:IYH) provides broader sector exposure and a higher dividend yield.

Both funds provide targeted access to the medical sector, yet they differ significantly in scope. The Invesco fund focuses narrowly on the Nasdaq-listed biotechnology space, whereas the iShares fund casts a wider net across the entire domestic healthcare landscape, including providers and equipment manufacturers.

Snapshot (cost & size)

Metric	IBBQ	IYH
Issuer	Invesco	iShares
Share price	$34.69 (as of 2026-09-18)	$71.17 (as of 2026-09-18)
Expense ratio	0.19%	0.37%
1-yr return (as of 2026-09-18)	44.6%	24.4%
Dividend yield	0.7%	1.1%
Beta	0.60	0.56
AUM	$0.1 billion	$3.9 billion

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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Invesco fund is significantly more affordable, sporting an expense ratio of 0.19% compared to the 0.37% charged by the iShares fund. Investors seeking higher immediate income may prefer the iShares fund, which offers a higher payout.

Performance & risk comparison

Metric	IBBQ	IYH
Max drawdown (5 yr)	(37.2%)	(17.9%)
Growth of $1,000 over 5 years (total return)	$1,336	$1,315

What's inside

The iShares U.S. Healthcare ETF provides exposure to 100 holdings across the healthcare and technology sectors. Its largest positions include Eli Lilly (NYSE:LLY) at 14.57%, Johnson & Johnson (NYSE:JNJ) at 10.30%, and Abbvie (NYSE:ABBV) at 7.40%. It was launched in 2000, and has paid $0.80 per share over the trailing 12 months, which on its recent ~$71.17 share price works out to a 1.1% yield.

The Invesco Nasdaq Biotechnology ETF focuses entirely on the healthcare sector with 248 individual holdings. Its top holdings include Amgen (NASDAQ:AMGN) at 8.05%, Vertex Pharmaceuticals (NASDAQ:VRTX) at 7.98%, and Gilead Sciences (NASDAQ:GILD) at 7.85%. It was launched in 2021, and has paid $0.26 per share over the trailing 12 months, which on its recent ~$34.69 share price works out to a 0.7% yield.

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

Which looks like the better buy

Investors looking for exposure to the healthcare industry can take two different approaches through the iShares U.S. Healthcare ETF (IYH) and the Invesco Nasdaq Biotechnology ETF (IBBQ). Deciding between the two depends on the factors that are important to your investment goals.

IBBQ is targeted toward the outsized growth potential of the biotech industry. This is the ETF for investors comfortable with a high-risk, high-reward fund. Its dividend yield is lower than IYH, but IBBQ is more about capturing gains from cutting-edge clinical trials and medical innovation, as demonstrated by its far larger one-year return. The trade-off is elevated volatility, as illustrated by the fund's greater five-year max drawdown.

IYH is for conservative investors who prioritize stability and dividend income. With over double the holdings of IBBQ, you get a more diversified fund representing both biotech and the larger healthcare sector. In exchange, the ETF lacks IBBQ's explosive upside potential, and you pay a higher expense ratio.

Robert Izquierdo has positions in Amgen and Johnson & Johnson. The Motley Fool has positions in and recommends AbbVie, Amgen, Eli Lilly, Gilead Sciences, and Vertex Pharmaceuticals. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.