IYH vs. FBT: Broad Healthcare ETF or Concentrated Biotech Play?

The iShares U.S. Healthcare ETF (NYSEMKT:IYH) provides broad, low-cost exposure to the domestic healthcare sector, whereas the First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) offers a high-conviction, more volatile play on biotechnology.

Both funds target the U.S. healthcare market but use different weighting strategies and sub-sector concentrations. This comparison explores how their divergent approaches to the healthcare landscape affect their risk profiles, costs, and historical performance.

Snapshot (cost & size)

Metric	FBT	IYH
Issuer	First Trust	iShares
Share price (as of Aug. 10, 2026)	$258.53	$71.14
Expense ratio	0.55%	0.38%
1-year return (as of Aug. 10, 2026))	57.7%	31.4%
Dividend yield	N/A	1.2%
Beta	0.66	0.58
AUM	$2.8 billion	$3.7 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-yearr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The iShares fund is the more affordable option for investors, carrying an expense ratio of 0.38%. This represents a meaningful cost advantage over the 0.55% charged by the First Trust ETF.

Performance & risk comparison

Metric	FBT	IYH
Max drawdown (5 year)	(29.9%)	(17.9%)
Growth of $1,000 over 5 years (total return)	$1,543	$1,327

What's inside

The iShares U.S. Healthcare ETF is designed to mirror the investment performance of a benchmark consisting of American companies in the healthcare industry. It holds 100 stocks. Its largest positions include Eli Lilly (NYSE:LLY) at 15.23%, Johnson & Johnson (NYSE:JNJ) at 10.05%, and AbbVie (NYSE:ABBV) at 7.01%. The fund was launched in 2000.

The First Trust NYSE Arca Biotechnology Index Fund targets the price movements of the NYSE Arca Biotechnology Index. It maintains a concentrated portfolio of 30 stocks. Top holdings include Halozyme Therapeutics (NASDAQ:HALO) at 4.39%, Corcept Therapeutics (NASDAQ:CORT) at 3.91%, and BeOne Medicines (NASDAQ:ONC) at 3.86%. The fund was launched in 2006.

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

Which looks like the better buy?

These two healthcare-focused ETFs take very different approaches to investing in the sector. The iShares U.S. Healthcare ETF has a much broader portfolio, holding 100 positions compared to First Trust's relatively concentrated group of just 30 equities. iShares also has nearly $1 billion more in assets under management than First Trust. Finally, IYH invests in companies across the healthcare sector, while FBT maintains a biotech focus.

One thing I think worth noting is the concentration risk present here, and how it's a different flavor for each ETF. In the case of IYH, the fund's top 10 positions account for roughly 58% of the portfolio. So even though the iShares fund holds 100 stocks, the weighting is such that your returns will depend on just a handful.

For FBT, the obvious concentration risk is that the fund holds only biotech companies. But presumably, if you were to invest in the First Trust ETF, it's because you do want that specific exposure. Also, no stock accounts for more than 5% of the portfolio, which I find appealing.

It's hard to compare these directly because it's basically pitting a basket of healthcare giants (Eli Lilly's market cap is over $1 trillion) against biotech upstarts (Halozyme weighs in around $11 billion). I don't own any sector-specific ETFs, but I do own a lot of big, boring funds that include healthcare giants like J&J, Pfizer, UnitedHealth, and so on. I would be more inclined to take a small position in FBT for that reason, if only to diversify my holdings.

Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, BeOne Medicines, Corcept Therapeutics, and Eli Lilly. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.