Where to Invest: Best Health Care Funds and ETFs for 2025

Introduction:

Looking to invest smartly in 2025? The health care sector may look weak on the surface, but for savvy investors, this could be the right time to step in. While short-term performance has been shaky, the long-term potential remains solid. Aging populations, innovation in treatments, and easing trade issues all point to future growth. If you're aiming to add resilience and diversity to your portfolio, health care funds and ETFs deserve your attention. Here’s a simplified guide to the Best Health Care Funds and ETFs for 2025 that could offer solid returns.

 Summary

1. iShares Global Healthcare ETF (IXJ)
2. Vanguard Health Care ETF (VHT)
3. Fidelity Select Health Care Portfolio (FSPHX)
4. Health Care Select Sector SPDR ETF (XLV)
5. Invesco Equal Weight Health Care ETF (RSPH)
6. SPDR S&P Biotech ETF (XBI)

1.  iShares Global Healthcare ETF (IXJ)

• Expense Ratio: 0.41%
• Yield: 1.6%

IXJ gives you worldwide access by investing in leading health care companies from the U.S., Europe, and Asia. It includes well-known names like Eli Lilly, Johnson & Johnson, and AbbVie. While flat this year, it shows a strong five-year return of 4.7%, beating its category index. It’s ideal for those wanting reliable large-cap stocks with some global diversity.

2. Vanguard Health Care ETF (VHT)

• Expense Ratio: 0.09%

VHT focuses solely on health care companies, including major players like UnitedHealth and Abbott Labs. It’s Currently down 2.2% for the year but manages a solid $17.7 billion in assets. Investors get exposure to both biotech innovations and stable pharma giants.

3. Fidelity Select Health Care Portfolio (FSPHX)

• Expense Ratio: 0.63%
• Yield: 0.0%

FSPHX puts 80% of its money into health care companies that have proven performance histories. Despite recent losses, it has long-term appeal. Managed by Edward Yoon since 2008, the fund includes top Holdings like Boston Scientific and Eli Lilly. Its recent 3-month return of 1.7% shows signs of recovery.

4. Health Care Select Sector SPDR ETF (XLV)

• Expense Ratio: 0.08%
• Yield: 1.9%

XLV is an affordable choice, managing $33 billion in total assets. It includes 60 health care stocks and has a five-star Morningstar rating. While down 2.1% in 2025, it’s gained 1.2% in the last month. It's ideal for investors seeking safety in reliable companies like Johnson & Johnson and Eli Lilly.

5. Invesco Equal Weight Health Care ETF (RSPH)

• Expense Ratio: 0.40%
• Yield: 0.8%

RSPH spreads investment evenly across 60 holdings, so no one company dominates. With $704 million in assets, it includes familiar names like Moderna and Cencora. Though the yield is modest, its equal-weight structure adds diversification and balance.

6. SPDR S&P Biotech ETF (XBI)

• Expense Ratio: 0.35%
• Yield: 0.2%

XBI focuses on biotech stocks, mainly investing in small and mid-sized companies. It’s more volatile but saw a 6% bounce in May. With $4.8 billion in assets and 125 holdings, XBI is ideal for investors looking for high-risk, high-reward potential.

Even with recent challenges, these funds offer a path forward. By choosing wisely, investors can tap into the health care sector’s potential and stay ahead in a changing market. These six picks stand out as some of the Best Health Care Funds and ETFs for 2025.

Frequently Asked Questions

Q.1. Are health care ETFs a good investment in 2025?
A.1. Yes, they offer long-term growth potential, especially with aging populations and medical innovation.

Q.2. Which is better: a health care ETF or mutual fund?
A.2. ETFs often have lower fees and more flexibility. Mutual funds may be better for long-term, active strategies.

Q.3. Is it safe to invest in health care funds now?
A.3. While the market is volatile, current low prices can be a good entry point for long-term investors.

Q.4. What’s the average return of health care ETFs?
A.4. It varies, but long-term returns typically align with or exceed the broader market depending on fund type.

Q.5. How do I choose the right health care ETF?
A.5. Look at fund size, expense ratio, top holdings, and past performance. Pick one that fits your risk profile.

Conclusion

Health care might be down in the market today, but it's not out. With strong long-term trends like aging populations, new tech, and growing global demand Whether you're looking for steady income or future growth, these funds can help you balance risk and reward. Just make sure to do your homework and invest with your goals in mind.

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Important Note: Please Read Before You Invest

We're just sharing some helpful tips, but remember, investing comes with risks. We can't promise that these tips will always work or that you'll make money. Everyone's financial situation is different, so it's smart to do your research or talk to a financial advisor before you invest. Using these tips, you agree that you're responsible for your investment decisions and results.