VHT vs. PBE: Which Health Care ETF Is the Better Buy?
2026-07-30 13:09
•Andy Gould •The Motley Fool
••• •••••••• Axe Cap view
Healthcare ETFs: Steady VHT or Volatile PBE?
Choosing between broad, low-cost healthcare exposure and focused, high-volatility biotech growth.
South African investors eyeing healthcare stocks often wonder about global exposure and its impact on the rand and local portfolios. Vanguard’s VHT offers a broad healthcare basket, which includes giants like Eli Lilly and Johnson & Johnson, providing defensive qualities with steady returns and a low fee of 0.09%. This suits investors who want to limit volatility, especially with the rand’s occasionally choppy moves against the dollar. On the other hand, Invesco’s PBE is a concentrated biotech play, with higher returns but far riskier swings, reflecting in its 37% drawdown last year. That’s a tough sell if you consider rand weakness can magnify losses when measured in rands. If you’re comfortable riding out sharp drops for potential outsized gains, PBE is worth a fraction of your portfolio. Otherwise, VHT stands out for balanced exposure and cost-efficiency. This view may be wrong if biotech breakthroughs accelerate faster than expected, dramatically boosting PBE’s holdings. this is just our opinion and not financial advice
Buy VHT for core healthcare exposure with moderate risk; consider a small allocation to PBE only if you can stomach volatility and rand depreciation. Avoid heavy concentration in PBE if rand weakness persists.
- VHT
- PBE
- USD/ZAR
- Rand depreciation increasing loss exposure in dollar-denominated ETFs
- Biotech sector volatility and regulatory setbacks
6/10
The Vanguard Health Care ETF (VHT) offers broad healthcare exposure with a low 0.09% expense ratio and 423 holdings, while the Invesco Biotechnology & Genome ETF (PBE) provides focused biotech exposure with 31 holdings and higher growth potential. PBE delivered a stronger 40.88% one-year return but experienced greater volatility with a 37.84% maximum drawdown, while VHT returned 27.85% with lower risk. VHT suits conservative investors seeking steady, low-cost exposure, while PBE appeals to risk-tolerant investors chasing biotech innovation.
Our take is based on reporting first published by The Motley Fool.