IXJ vs XHS

IXJBiShares Global Healthcare ETF

XHSAState Street SPDR S&P Health Care Services ETF

In short

IXJ Most healthcare sector funds stop at the US border. IXJ tracks a global index instead: roughly 110 drugmakers, biotechs and device makers worldwide, and it has been doing it since 2001.

XHS Most health care ETFs are pharma funds in disguise. XHS buys the delivery system instead: insurers, hospitals, distributors and clinics, roughly equal weighted so one giant insurer does not run the show.

Stated mandate

IXJ The fund seeks to track an index of global healthcare-sector equities, offering diversified access to pharmaceutical, biotech, and medical-device companies worldwide.

XHS The fund seeks to track the total return of the S&P Health Care Services Select Industry Index before fees and expenses, providing targeted exposure to health care services companies.

Why people hold it

• IXJ Global by charter. It tracks S&P's capped global health care index, so companies listed outside the US sit in the same basket as the American giants.ishares.com
• 0.38% a year, below the median fee in its broad healthcare peer group, for a portfolio of about 110 pharma, biotech and medical-device names.
• The word capped in the index name does real work: it limits how large any single mega-cap drugmaker can grow inside the fund.ishares.com
• Running since 2001 and now a multi-billion-dollar fund. That is a long operating record, not a launch-and-see product.

• XHS No drugmakers, no device makers. The index tracks four slices of care delivery: distributors, facilities, health care services and managed care.ssga.com
• Modified equal weighting spreads about 60 names across large, mid and small caps, so the portfolio is not a bet on two or three mega caps.ssga.com
• 0.35% a year sits below the 0.50% median for broad health care ETFs, on a fund that has been running since 2011.
• Ranks in the top quartile of the broad health care ETFs we grade.

Worth knowing

• IXJ The worldwide reach carries a price tag: peers XLV and FHLC (0.08%) and VHT (0.09%) charge a fraction of IXJ's 0.38%.
• One sector, one storyline. Patent cliffs, trial data and drug-pricing politics tend to move the whole basket at once.
• Trading is moderate rather than heavy, so bid-ask spreads are worth a glance on larger orders.

• XHS Cheap against the median, not against the giants: XLV, VHT and FHLC charge under a tenth of a percent for cap weighted whole sector exposure.
• Thinly traded next to the big sector funds, so spreads and limit orders matter more here.
• Leaving out pharma and biotech means it moves differently from a whole sector fund, and insurers and hospitals sit close to reimbursement policy.ssga.com

Full IXJ profile⁠

Full XHS profile⁠