Investors looking to gain exposure to the healthcare sector have two notable options in the Fidelity MSCI Health Care Index ETF (NYSEMKT: FHLC) and the Invesco Pharmaceuticals ETF (NYSEMKT: PJP).
Both funds operate within the medical space, but their underlying strategies, costs, and risk profiles differ in ways that matter significantly for long-term investors.
FHLC carries a notably lower expense ratio of 0.08%, compared to PJP’s 0.57%, translating to $8 versus $57 annually per $10,000 invested.
That gap may appear modest at first glance, but it can compound into thousands of dollars in lost returns over the course of a long investment horizon.
FHLC also offers a higher dividend yield of 1.29%, versus 0.88% for PJP, making it more attractive to income-focused investors seeking consistent distributions.
On the performance side, PJP has delivered stronger returns, with a one-year total return of 44.4% compared to FHLC’s 31.3% as of August 22, 2026.
Over five years, a $1,000 investment in PJP would have grown to $1,679, while the same amount placed in FHLC would have reached $1,349 over the same period.
PJP achieves this by taking a concentrated approach, holding just 33 pharmaceutical stocks with top positions in Abbott Laboratories, Amgen, and AbbVie.
FHLC, by contrast, tracks a broad index of U.S. healthcare stocks with more than 300 holdings, including Eli Lilly, Johnson and Johnson, and AbbVie across the full sector.
This diversification is a key structural advantage for FHLC, as it reduces exposure to any single pharmaceutical subsector downturn or wave of industry-specific volatility.
PJP’s concentrated portfolio introduces more concentrated risk, even though its five-year max drawdown of 17.5% is only marginally better than FHLC’s 17.8% over the same window.
FHLC commands a much larger asset base, with $3.3 billion in assets under management compared to PJP’s $472 million, reflecting broader investor adoption.
FHLC was launched in 2013 and has paid $1.02 per share in dividends over the trailing 12 months, while PJP, launched in 2005, has paid $1.06 per share in that same period.
PJP also carries a lower beta of 0.47 versus FHLC’s 0.57, suggesting it has historically moved less in tandem with the broader S&P 500 index on a monthly basis.
Ultimately, investors who prioritize low fees, broad diversification, and a higher dividend yield will find FHLC to be the more cost-efficient and lower-risk choice for healthcare exposure.
Those willing to accept higher fees and a more concentrated pharmaceutical focus in exchange for stronger recent performance may find PJP a compelling complement to an existing portfolio.
