Top 12 Healthcare ETFs to Invest in for 2025 Growth

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12 Best Healthcare ETFs for Growth and Innovation

Healthcare is a resilient sector with strong growth potential, making it an attractive choice for investors seeking stability and innovation. Exchange-Traded Funds (ETFs) allow you to invest in a diversified mix of healthcare companies from pharmaceutical giants to cutting-edge biotech firms without picking individual stocks.

This guide highlights 12 top healthcare ETFs, showing their key holdings, benefits, and risk profiles to help you make informed investment decisions.

1. Vanguard Health Care ETF (VHT)

VHT is a popular choice for investors seeking broad exposure to the U.S. healthcare sector. It combines large-cap pharmaceuticals, biotech leaders, and service providers to create a diversified portfolio that balances growth and stability.

• Biotech Leaders: Includes leading firms driving medical breakthroughs.
• Pharmaceutical Giants: Major drug developers for steady growth.
• Diverse Healthcare Services: Exposure across multiple healthcare segments.

2. iShares U.S. Healthcare ETF (IYH)

IYH provides a concentrated view of the U.S. healthcare sector, primarily focusing on large-cap stocks. Its structure offers both growth potential and defensive qualities, suitable for long-term investors seeking stability and steady returns.

• Diversification: 100+ large-cap healthcare stocks.
• Growth Potential: Focus on biotech and health tech.
• Stability: Essential healthcare services provide resilience.

3. Health Care Select Sector SPDR Fund (XLV)

XLV targets large-cap U.S. healthcare companies, offering high liquidity and proven performance. It is ideal for investors looking for established firms with reliable returns and a low-cost investment structure.

• High Liquidity: Easy to trade with minimal price impact.
• Diverse Holdings: Covers pharma, biotech, and insurance providers.
• Proven Performance: Consistent historical returns.
• Low Expense Ratio: Keeps costs low over time.

4. Invesco S&P SmallCap Health Care ETF (PSCH)

PSCH offers exposure to small-cap healthcare companies, giving investors access to innovative and high-growth firms. This fund is suited for those willing to take on more risk in exchange for potential upside.

• Small-Cap Exposure: Pharmaceuticals, biotech, and medical devices.
• Innovation Potential: Early-stage firms with high growth.
• Healthcare Services: Modernized delivery systems for added diversification.

5. ARK Genomic Revolution ETF (ARKG)

ARKG focuses on companies leading genomic and biotech innovation. It is ideal for investors with a higher risk tolerance who want to participate in transformative healthcare breakthroughs.

• Disruptive Innovation: Gene therapy, CRISPR, and personalized medicine.
• Diverse Holdings: Diagnostics, pharma, and agri-biotech firms.
• Higher Volatility: Potential for high returns and larger swings.

6. First Trust NYSE Arca Biotechnology Index Fund (FBT)

FBT provides exclusive exposure to biotech companies, ranging from startups to established players. It is a focused option for investors confident in the sector’s growth potential.

• Niche Focus: Pure-play biotech exposure.
• Balanced Portfolio: Oncology, immunology, and gene therapy.
• High Upside: Driven by R&D success and regulatory approvals.

7. SPDR S&P Biotech ETF (XBI)

XBI is an equal-weighted ETF providing broad access to biotech companies of all sizes. Its structure makes it appealing to investors seeking innovation-driven growth while spreading risk across the sector.

• Equal-Weighted Exposure: Small and large biotech companies.
• Responsive to News: FDA approvals and sector updates impact returns.
• Innovation-Driven: Geared toward growth-focused investors.

8. ProShares Ultra Nasdaq Biotechnology ETF (UBIO)

UBIO is a leveraged ETF designed to deliver twice the daily return of the Nasdaq Biotechnology Index. It is best suited for experienced traders seeking short-term gains rather than long-term investors.

• 2x Leverage: Amplifies returns and losses.
• Short-Term Focus: Daily rebalancing makes it risky for long-term holds.
• Market Sensitivity: Best for bullish biotech trends.

9. Global X Aging Population ETF (AGNG)

AGNG invests in companies positioned to benefit from global aging trends. This thematic ETF is ideal for investors looking to capitalize on demographic shifts affecting healthcare demand.

• Healthcare Services: Senior care and home health providers.
• Pharmaceuticals: Age-related chronic conditions.
• Senior Housing: Assisted-living and retirement communities.

10. Robert W. Baird Mid Cap Healthcare Growth Investor Class Fund

This actively managed mutual fund targets mid-cap healthcare firms with strong growth potential. Expert management helps identify promising companies across biotech, medical devices, and healthcare services.

• Strategic Selection: Focused on growth and innovation.
• Experienced Management: Sector experts pick stocks actively.
• Mid-Cap Exposure: From biotech to medical devices.

11. Direxion Daily S&P Biotech Bull 3X Shares (LABU)

LABU is an extremely leveraged ETF designed for short-term traders. It offers triple exposure to biotech indexes but carries very high volatility and risk.

• 3x Leverage: High volatility, high reward potential.
• Requires Timing: Effective only for experienced traders.
• Short-Term Focus: Not suitable for long-term investing.

12. Injector Health + Wellness Innovation ETN

This ETN tracks broad health and wellness trends, including personalized healthcare, digital monitoring, and holistic wellness. It’s ideal for investors seeking exposure to consumer-driven healthcare innovation.

• Health Tech: Smart home monitoring and telemedicine.
• Genetic Testing: Personalized health solutions.
• Holistic Health: Fitness, nutrition, and wellness trends.

Comparison Table of Key Healthcare ETFs

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Final Thoughts

Healthcare ETFs provide opportunities for both conservative and growth-focused investors. From stable, diversified funds to high-risk biotech and thematic picks, these options allow you to benefit from long-term healthcare trends, innovation, and demographic shifts.

Frequently Asked Questions

Why invest in healthcare ETFs?

Healthcare is a defensive sector, often resilient during market downturns. ETFs offer diversified exposure without relying on individual stock performance.

What’s the difference between ETFs and mutual funds?

ETFs trade like stocks with lower fees and flexibility. Mutual funds are often actively managed, may cost more, and require higher minimums.

Are healthcare ETFs suitable for beginners?

Yes. Broad ETFs like VHT and XLV offer diversified exposure, low costs, and long-term stability for first-time investors.

Which companies are typically in healthcare ETFs?

Pharmaceuticals (Pfizer, Johnson & Johnson), biotechnology (Amgen, Gilead), medical devices (Medtronic, Abbott Labs), healthcare providers (UnitedHealth, CVS Health), plus some health tech and senior living companies.

What are the main risks?

Regulatory changes, biotech volatility, and concentration in a few large firms can impact returns. Leveraged ETFs add extra risk for short-term traders.

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Reviewed and edited by Albert Fang.

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Article Title: Top 12 Healthcare ETFs to Invest in for 2025 Growth

https://fangwallet.com/2025/10/07/top-12-healthcare-etfs-to-invest-in-for-2025-growth/

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