November 3, 2026

Healthcare ETFs in 2026: Biotech Leads, Medical Devices Lag

Investing in Healthcare

How Have the Top Healthcare ETFs Performed in 2026?

Below, we compare eight of the largest healthcare ETFs on performance, cost, and what they actually hold.

Total returns (market price) from ETF.com fund pages, as of Nov. 3, 2026. AUM and expense ratios from ETF.com.

The spread between the best and worst fund is about 35.5 percentage points: IBB is up 26.79% YTD, while IHI is down 8.72%. The four broad U.S. sector funds (XLV, IYH, FHLC and VHT) are within about one percentage point of each other year to date.

Why Are Biotech ETFs IBB and XBI Leading?

IBB is up 26.79% YTD and 34.41% over the past year, and XBI is up 24.82% YTD and 35.47% over one year, the strongest one-year return in the group. Both are well ahead of the broad sector funds. The recent trend has diverged, though. Over the past month, IBB gained 4.14%, while XBI slipped 1.54%. Over three months, IBB returned 14.69% versus 3.43% for XBI.

The difference comes down to construction. IBB is weighted toward large biotech companies, with its top 10 holdings making up 51.84% of the fund, led by Gilead Sciences (9.08%), Amgen (8.44%), Vertex Pharmaceuticals (7.92%) and Regeneron (6.58%). XBI uses a modified equal-weight approach across 158 holdings, so its top 10 account for only 18.18% of assets and no single stock exceeds about 2.4%. That gives XBI far more exposure to small and mid-cap biotech, which tends to move more sharply in both directions.

Which Broad Healthcare ETF Is Best?

The broad funds delivered nearly identical results so far in 2026:

XLV: 20.72% YTD, 0.08% expense ratio, $49.19B AUM
IYH: 20.20% YTD, 0.37% expense ratio, $4.71B AUM
FHLC: 19.99% YTD, 0.08% expense ratio, $3.95B AUM
VHT: 19.77% YTD, 0.09% expense ratio, $20.80B AUM

XLV edged out the group, and its holdings may help explain why. It draws only from the S&P 500, so it is more concentrated: 63 holdings, with the top 10 at 61.55% of the fund and Eli Lilly alone at 16.92%. VHT holds 411 stocks, with a 51.75% top-10 weight and a 12.93% Eli Lilly position. In fact, the four broad funds rank YTD in the same order as their Eli Lilly weightings (XLV 16.92%, IYH 16.39%, FHLC 14.62%, VHT 12.93%), suggesting the more mega-cap-heavy portfolios have had a slight edge this year, though the gaps are small.

For cost-conscious investors, XLV and FHLC share the lowest expense ratio at 0.08%, with VHT close behind at 0.09%. IYH charges 0.37% for similar exposure. XLV is also by far the largest fund, with $49.19 billion in assets.

Medical Device ETF Woes and Global Healthcare

IHI is the clear laggard, down 8.72% YTD and 5.66% over the past year. It is also highly concentrated: its top 10 holdings make up 76.12% of the fund, led by Abbott Laboratories (18.06%), Intuitive Surgical (14.62%) and Medtronic (11.52%). With roughly 44% of the fund in three stocks, the fund’s returns hinge largely on a handful of large device makers.

There are signs of a turn. IHI gained 12.01% over the past month, the best one-month return of any fund in this comparison, though it still has ground to make up before it is positive for the year.

IXJ, which holds healthcare companies in the U.S. and abroad, is up 16.61% YTD and 25.37% over one year. That trails the U.S.-only sector funds by roughly three to four percentage points this year. It has been stronger recently, however: its 11.61% one-month return tops all four broad U.S. funds, including XLV at 11.08%.

Key Takeaways for Healthcare ETF Investors

Biotech leads 2026: IBB (26.79% YTD) and XBI (24.82% YTD) top the group, but XBI has cooled over the past month.
Broad funds are close substitutes: XLV, IYH, FHLC and VHT are within about one point of each other YTD, so cost and concentration matter more than past returns when choosing among them.
Medical devices are the weak spot: IHI is down 8.72% YTD despite a strong past month.
Concentration varies widely: top-10 weights range from 18.18% (XBI) to 76.12% (IHI).

Frequently Asked Questions

What is the best-performing healthcare ETF in 2026?

Among the large healthcare ETFs compared here, IBB has the highest YTD return at 26.79% as of Nov. 3, 2026, followed by XBI at 24.82%, per ETF.com.

What is the largest healthcare ETF?

XLV is the largest, with $49.19 billion in assets, followed by VHT at $20.80 billion.

What is the cheapest healthcare ETF?

XLV and FHLC have the lowest expense ratio among the funds compared here, at 0.08%, and VHT charges 0.09%.

What is the difference between IBB and XBI?

IBB is weighted toward large biotech companies, with 51.84% in its top 10 holdings. XBI uses modified equal weighting across 158 stocks, giving it more small and mid-cap exposure and only 18.18% in its top 10.

Is XLV or VHT better?

Both are low-cost (0.08% vs. 0.09%) and returned about 20% YTD. XLV holds 63 S&P 500 healthcare stocks and is more concentrated in mega-caps; VHT holds 411 stocks across all market caps.

Past performance is not indicative of future results. This article is for informational purposes only and is not investment advice.

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