Healthcare ETF Picks: Which Life Science Funds Delivered in 2024?

Why Life Science ETFs Matter for Your Portfolio

Looking to gain broad exposure to the healthcare sector without betting on individual companies? A life science ETF offers exactly that—diversified access to multiple stocks while reducing company-specific risk. Fund managers typically specialize in segments like biotech, pharmaceuticals, or medical devices, carefully weighting holdings to track industry movements and optimize returns. With dozens of options available, selecting the right fund can be challenging. To simplify the decision, we’ve analyzed the top-performing life science ETFs based on year-to-date returns and assets under management through November 14, 2024.

The Winners: Top 5 Life Science ETF Performers

1. SPDR Biotech ETF (ARCA:XBI) — Leading the Charge

2024 Year-to-Date Return: 16.8 percent
Assets Under Management: US$7.82 billion

Launched in 2006, this biotechnology-focused fund tracks the S&P Biotechnology Select Industry Index and maintains a sharp focus on US companies. Its low expense ratio of 0.35 percent combined with a five-year return of 5.01 percent makes it appealing to long-term investors. The portfolio contains 144 holdings, with 76 percent allocated to large and mid-cap firms. Top positions include Incyte, United Therapeutics, and Gilead Sciences—all heavyweight players in the biotech space.

2. First Trust NYSE Arca Biotechnology Index Fund (ARCA:FBT) — Concentrated Exposure

2024 Year-to-Date Return: 13.1 percent
Assets Under Management: US$1.21 billion

This 2006-launch focused on the Amex Biotechnology Index, offering a more concentrated play than peers with just 31 holdings. The 0.56 percent expense ratio reflects its specialized approach. Over five years, it has delivered 6.71 percent returns. While predominantly weighted toward large-cap US biotech, it includes selective European exposure. Key holdings are Exelixis, Intra-Cellular Therapies, and Incyte.

3. Vanguard Health Care Index Fund ETF (ARCA:VHT) — Broad-Based Healthcare Access

2024 Year-to-Date Return: 11.9 percent
Assets Under Management: US$17.95 billion

Arriving in 2004, this comprehensive life science ETF casts a wide net across the healthcare ecosystem. The fund boasts 414 holdings—the most diverse on this list—with over 86 percent concentrated in large-cap US healthcare firms. Its ultra-low expense ratio of 0.1 percent is a standout feature, while five-year returns sit at 11.07 percent. Eli Lilly, UnitedHealth Group, and AbbVie lead the portfolio by weight.

4. iShares US Medical Devices ETF (ARCA:IHI) — Device-Focused Strategy

2024 Year-to-Date Return: 11.7 percent
Assets Under Management: US$4.9 billion

Established in 2006, this life science ETF zeroes in specifically on US-based medical device manufacturers. With a 0.4 percent expense ratio and 8.27 percent five-year returns, it appeals to investors bullish on the devices segment. The fund is concentrated, with 89 percent of its 100+ holdings in large-cap companies. Abbott Laboratories, Intuitive Surgical, and Stryker Corporation comprise the top weighted positions.

5. iShares US Healthcare ETF (ARCA:IYH) — The Veteran Play

2024 Year-to-Date Return: 11.7 percent
Assets Under Management: US$3.36 billion

Launched in 2000, this is the longest-tenured life science ETF on our list. It carries a 0.39 percent expense ratio and has generated 11.12 percent returns over five years. With 109 holdings split 94 percent toward large-cap stocks, it functions best as a tactical tool for sector rotation rather than a buy-and-hold core holding. Eli Lilly, UnitedHealth Group, and Johnson & Johnson anchor the portfolio.

The Takeaway

Life science ETFs offer flexible entry points into healthcare investing. Whether you seek concentrated biotech exposure or diversified sector coverage, these five funds demonstrate solid 2024 performance. Choose based on your risk tolerance, expense sensitivity, and investment horizon.