Healthcare ETF Comparison: Fidelity's FHLC vs. Invesco's Biotech-Focused IBBQ
Key Points
The Fidelity MSCI Health Care Index ETF features a lower expense ratio of 0.08% and a higher dividend yield of 1.2%.
The Invesco Nasdaq Biotechnology ETF has delivered a higher 1-year total return of 56.4% but carries a more significant maximum drawdown of 37.9%.
The Fidelity MSCI Health Care Index ETF provides broader exposure with 365 holdings and manages $3.3 billion in assets under management (AUM).
The Fidelity MSCI Health Care Index ETF (NYSEMKT:FHLC) provides broad, low-cost access to the entire healthcare sector, whereas the Invesco Nasdaq Biotechnology ETF (NASDAQ:IBBQ) targets a narrower slice of biotech with higher recent returns.
Healthcare investors often choose between specialized niches and broad industry exposure. While both funds target the medical space, they differ significantly in their risk profiles, expense structures, and historical volatility, making the choice dependent on whether an investor seeks pure-play biotech or diversified healthcare.
Snapshot (cost & size)
| Metric | IBBQ | FHLC |
|---|---|---|
| Issuer | Invesco | Fidelity |
| Share price | $36.45 (as of 2026-08-27) | $83.48 (as of 2026-08-27) |
| Expense ratio | 0.19% | 0.08% |
| 1-yr return (as of 2026-08-27) | 56.4% | 29.2% |
| Dividend yield | 0.7% | 1.2% |
| Beta | 0.62 | 0.60 |
| AUM | $95.3M | $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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Cost-conscious investors may prefer the Fidelity fund, which charges 0.08% compared to the Invesco fund at 0.19%. Additionally, the Fidelity fund provides a higher payout, with a yield gap of 0.48 percentage points over its peer.
Performance & risk comparison
| Metric | IBBQ | FHLC |
|---|---|---|
| Max drawdown (5 yr) | (37.9%) | (17.7%) |
| Growth of $1,000 over 5 years (total return) | $1,421 | $1,331 |
What's inside
The Fidelity MSCI Health Care Index ETF seeks to correspond to the MSCI USA IMI Health Care Index. Its largest positions include Eli Lilly (NYSE:LLY) at 12.93%, Johnson & Johnson (NYSE:JNJ) at 8.81%, and Abbvie (NYSE:ABBV) at 6.30%. The fund holds 365 securities and focuses on healthcare and technology. It was launched in 2013. The Fidelity MSCI Health Care Index ETF has paid $1.02 per share over the trailing 12 months, which on its recent ~$83.5 share price works out to a 1.2% yield.
The Invesco Nasdaq Biotechnology ETF seeks to mirror the performance of the Nasdaq Biotechnology Index, which gauges biotech and pharmaceutical companies traded on the Nasdaq. Its top holdings include Amgen (NASDAQ:AMGN) at 8.59%, Vertex Pharmaceuticals (NASDAQ:VRTX) at 8.10%, and Gilead Sciences (NASDAQ:GILD) at 7.33%. It manages 251 holdings and maintains a 100% allocation to the healthcare sector. It was launched in 2021. The Invesco Nasdaq Biotechnology ETF has paid $0.26 per share over the trailing 12 months, which on its recent ~$36.5 share price works out to a 0.7% yield.
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Which looks like the better buy
For those seeking to invest in the healthcare field, the Fidelity MSCI Health Care Index ETF (FHLC) and Invesco Nasdaq Biotechnology ETF (IBBQ) offer convenient, efficient ways to do so, but are very different choices. Picking between them depends on your investment objectives.
FHLC is for investors who want broad exposure. While it seeks to mirror the performance of the the MSCI USA IMI Health Care Index, FHLC does not hold every stock, but rather, a representative sample using characteristics such as market cap. Its a more diversified fund with over 300 holdings that span both biotech and the larger healthcare sector. It may not have the explosive growth offered by IBBQ, but its larger dividend yield and broad exposure provides more stability, as demonstrated by its far lower max drawdown.
IBBQ is for investors comfortable with the volatility inherent in this high risk, high reward fund. This is the ETF for those seeking the incredible upside potential of biotech companies. But since these businesses depend on unpredictable clinical trials data on the path to federal approval of their treatments, IBBQ's performance can be volatile.
Robert Izquierdo has positions in Amgen and Johnson & Johnson. The Motley Fool has positions in and recommends AbbVie, Amgen, Eli Lilly, Gilead Sciences, and Vertex Pharmaceuticals. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.