Will the Invesco Pharma ETF or iShares Global Healthcare Fund Be the Better Health Care Fund in 2026?
2026-07-20 14:17
•Brendan Coffey •The Motley Fool
•••• ••••• Axe Capital view
PJP vs IXJ: Which Healthcare ETF Works for SA Investors?
Invesco’s focused pharma ETF outperforms the broader iShares global healthcare fund, but local investors should weigh concentration risks and rand impact.
The Invesco Pharmaceuticals ETF (PJP) has beaten the iShares Global Healthcare ETF (IXJ) comfortably over the past year, with a 45% return versus about 18%. PJP’s strength comes from a tighter U.S. pharma focus and a smaller number of holdings, betting on big names like Eli Lilly and AbbVie. That worked well through pockets of innovation and vaccine rollouts. IXJ offers broader global healthcare exposure with 110 names, a slightly cheaper cost, and a better dividend yield, but its diversification has dulled returns recently. South African investors need to watch the rand. The USD/ZAR rate remains volatile, and since these ETFs trade in dollars, a weaker rand boosts local rand returns, while a stronger rand cuts them. Given the stronger returns but higher concentration risk, PJP suits those hunting growth and can handle shocks. IXJ could appeal if you want smoother, more defensive exposure. Be careful: regulatory changes or drug approval misses in the U.S. could hurt PJP badly. this is just my opinion and not financial advice
I’d buy PJP for higher growth exposure but keep position sizes modest and watch the rand closely. Use IXJ if you prefer steadier income and global healthcare diversification.
- PJP
- IXJ
- USD/ZAR
- U.S. pharma regulatory risks hitting PJP
- Rand strengthening reducing ZAR ETF returns
6/10
The article compares two healthcare ETFs: Invesco Pharmaceuticals ETF (PJP), which focuses on concentrated U.S. pharma exposure with 29 holdings, and iShares Global Healthcare ETF (IXJ), which offers diversified global healthcare with 110 holdings. PJP delivered superior 1-year returns of 44.90% versus IXJ's 18.20%, though IXJ has a lower expense ratio (0.40% vs 0.57%) and higher dividend yield (1.50% vs 0.90%). The article recommends PJP for investors seeking healthcare exposure due to its stronger performance across most timeframes.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Brendan Coffey
Categories: Rates, Equities, Capital Returns, Healthcare
Tickers: PJP, IXJ, LLY, JNJ, ABBV
Sentiment: Positive - PJP is recommended as the better choice, demonstrating superior performance with 44.90% 1-year returns, outperforming IXJ across most timeframes (YTD, 3-year, 5-year), and achieving this with a smaller maximum drawdown despite a slightly higher expense ratio. IXJ is presented as a solid alternative offering broader diversification with 110 global holdings, lower expense ratio (0.40%), and higher dividend yield (1.50%), but is not recommended due to underperformance relative to PJP in most performance metrics.
Keywords: healthcare ETF, pharmaceutical stocks, fund comparison, expense ratio, dividend yield, portfolio performance, diversification
Insights:
- PJP: Positive: PJP is recommended as the better choice, demonstrating superior performance with 44.90% 1-year returns, outperforming IXJ across most timeframes (YTD, 3-year, 5-year), and achieving this with a smaller maximum drawdown despite a slightly higher expense ratio.
- IXJ: Neutral: IXJ is presented as a solid alternative offering broader diversification with 110 global holdings, lower expense ratio (0.40%), and higher dividend yield (1.50%), but is not recommended due to underperformance relative to PJP in most performance metrics.
- LLY: Neutral: Mentioned as a major holding in both funds (10.9% in IXJ, 5.4% in PJP), indicating it is a significant component of healthcare exposure but without specific performance commentary.