Fidelity vs VanEck Healthcare ETFs: Broad Exposure or Pharma Focus
The Fidelity MSCI Health Care Index ETF (FHLC +0.47%) provides broad, low-cost exposure to the entire healthcare sector, whereas the VanEck Pharmaceutical ETF (PPH +1.19%) offers a concentrated, higher-yielding focus on global pharmaceutical giants.
Investors choosing between these funds must decide between industry breadth and narrow specialization. Both funds serve as defensive anchors for an equity portfolio, but they differ significantly in their construction. The Fidelity fund captures the diverse breadth of the medical world, including equipment and services, while the VanEck fund drills specifically into the world’s largest drug manufacturers. This comparison helps identify whether a broad sector tilt or a specific industry focus better fits a diversified portfolio.
Snapshot (cost & size)
| Metric | PPH | FHLC |
|---|---|---|
| Issuer | VanEck | Fidelity |
| Share price | $115.08 (as of 2026-08-20) | $83.64 (as of 2026-08-20) |
| Expense ratio | 0.36% | 0.08% |
| 1-yr return (as of 2026-08-20) | 32.4% | 29.4% |
| Dividend yield | 1.9% | 1.2% |
| Beta | 0.46 | 0.60 |
| AUM | $1.0B | $3.3B |
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 as of the close of trading on Aug. 20, 2026.
Expense ratios are a primary differentiator here, as the Fidelity fund is significantly more affordable, sporting a fee of only 0.08% compared to the 0.36% charged by the VanEck fund. Investors prioritizing cash flow may find the VanEck fund more appealing, as it currently offers a yield advantage of 0.7 percentage points over the broader Fidelity healthcare index.
Performance & risk comparison
| Metric | PPH | FHLC |
|---|---|---|
| Max drawdown (5 yr) | -20.3% | -17.7% |
| Growth of $1,000 over 5 years (total return) | $1,656 | $1,332 |
What’s inside
The Fidelity MSCI Health Care Index ETF manages a broad basket of 365 holdings, focusing on the wider healthcare sector with a 99% allocation. Its largest positions include Eli Lilly & Co (LLY -1.06%) at 13.3%, Johnson & Johnson (JNJ +0.53%) at 8.8%, and Abbvie Inc (ABBV +0.48%) at 6.5%. This fund was launched in 2013. Fidelity MSCI Health Care Index ETF has paid $1.02 per share over the trailing 12 months, which on its recent ~$84 share price works out to a 1.2% yield.
The VanEck Pharmaceutical ETF offers a more concentrated approach with only 26 holdings, focused exclusively on the healthcare sector. Top holdings include Eli Lilly & Co at 19.1%, Merck & Co Inc (MRK +3.84%) at 7.8%, and Novartis Ag (NVS +1.24%) at 10.5%. It was launched in 2011. VanEck Pharmaceutical ETF has paid $2.17 per share over the trailing 12 months, which on its recent ~$115 share price works out to a 1.9% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy?
Both these ETFs offer exposure to the healthcare sector and are alike in many ways.
The similarities: Both funds are almost all (99%-plus) in healthcare stocks, as their names indicate (it pays to watch for funds not aligned with their apparent strategy), and both are heavily focused on their top 10 holdings, with PPH dedicating nearly three-quarters of its assets to its top ten, while FHLC commits more than 52% to its roster.
But there are some key differences investors should take note of.
PPH is overwhelmingly focused on large caps, at 90% of assets, while FHLC is 66% large caps, 22% mid caps, and 11% small caps (the numbers don’t add to 100% because of rounding).
PPH also has a mandate to go far and wide for its holdings, with just 64% of holdings in U.S. stocks compared to close to 100% for FHLC. That means FHLC not only draws in fast-growing biotechs, but health insurance companies, which have a different risk profile. But that doesn’t actually alter very much the max drawdown differences over various periods between the ETFs.
So these differences end up creating different investment returns over time. Here, PPH is the clear winner in most periods. The fund has returned an annnualized 14.4%, 10.2%, and 8% over the 3-year, 5-year, and 10-year time frames.
FHLC, meanwhile, has given investors 8.9%, 5.1%, and 9.9% ovcer the 3-, 5-, and 10-year periods, respectively. FHLC wins over the 10-year period, a big win for the fund, but PPH has been firing on all cylinders in recent years.
Typically, the best fund to choose is the one with the best 10-year returns, but PPH appears to be doing an excellent job with its concentrated portfolio in recent years. The bet here is that it continues. Go with the VanEck Pharmaceutical ETF.
