Fidelity Healthcare ETF vs. iShares Pharma Fund: Which Wins?

Fidelity MSCI Health Care Index ETF offers a lower expense ratio of 0.08% compared to the 0.37% fee for iShares U.S. Pharmaceuticals ETF.

iShares' fund provides concentrated exposure to 56 pharmaceutical stocks, while Fidelity's holds 338 stocks across the broader healthcare sector.

The iShares fund delivered a higher one-year total return of 60% as of Aug. 10, 2026.

While Fidelity MSCI Health Care Index ETF (NYSEMKT:FHLC) provides broad healthcare exposure at a very low cost, iShares U.S. Pharmaceuticals ETF (NYSEMKT:IHE) offers a concentrated focus on the domestic pharmaceutical sector for investors seeking industry-specific depth.

Investors looking to capitalize on medical innovation often choose between broad sector funds and specialized industry niches. This comparison explores how the diversified Fidelity fund compares against the targeted iShares pharmaceutical fund, assessing whether broader diversification or sector concentration better suits specific portfolio objectives within the American healthcare market. The choice often hinges on whether an investor wants exposure to medical devices and services or just pure-play drug manufacturers.

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 Fidelity fund is significantly more affordable for long-term investors, carrying an expense ratio of 0.08% compared to the 0.37% charged by the iShares ETF.

Fidelity’s fund provides a broad sweep of the healthcare landscape, diversifying across 338 holdings to minimize individual stock risk. Its largest positions include Eli Lilly (NYSE:LLY) at 13.45%, Johnson & Johnson (NYSE:JNJ) at 8.82%, and AbbVie (NYSE:ABBV) at 6.15%. It was launched in 2013 and tracks a healthcare index. The fund has paid $1.02 per share over the trailing 12 months.