10 Best Performing Healthcare ETFs in 2022

Published December 12, 2022 at 1:19 pm EST Updated August 19, 2026 at 8:55 am EDT

In this article, we will discuss the 10 best performing healthcare ETFs in 2022.

2022 has been riddled with volatility, inflation, interest rates, and panicky investors. Investors’ focus has shifted from cyclical and growth sectors towards defensive and value sectors amid substantially high CPI prints, an aggressive Fed, and a turbulent market. Equities have had a tough year but have recently started to see a bounce-back, after a weak CPI print was reported for October. As of December 9, the S&P has shed 18% of its value year to date, the Nasdaq has dipped 30.5% since the beginning of 2022, and the Dow is down 8.50% for the year.

Investors are finding refuge in consumer defensive sectors, and particularly healthcare. On December 10, Strategas head of technical analysis, Chris Verrone, appeared in an interview on CNBC where he discussed why he thinks healthcare will be a leading sector in 2023. Healthcare is one of Chris Verrone’s “Top Ideas” as we head into the next year. The analyst noted that though “pharmaceuticals has been a dead industry for the better part of the last 5 or 6 years” the pharmaceutical stocks have started to “break out”. Verrone said that “we have seen leadership really coming from the likes of Merck & Co., Inc. (NYSE:MRK) and Bristol-Myers Squibb Company (NYSE:BMY)” and that he sees healthcare as a leading sector into 2023 and it is a “theme worth playing”.

While the sell offs in equities have shaken up investor confidence, investors can still work around gaining exposure to the much-anticipated leading sector in a less risky way. Investing in healthcare ETFs (exchange-traded funds) over healthcare stocks is a great way to gain exposure to the healthcare sector without having to pick and choose individual stocks. Healthcare ETFs can offer a diversified portfolio of healthcare companies, allowing investors to spread their risk across a range of different healthcare stocks. Healthcare ETFs are also generally more liquid than individual stocks, meaning that investors can enter or exit the market quickly and easily. This is beneficial for investors who don’t have a long-term investment horizon and are looking to take advantage of short-term market movements.

Overall, investing in healthcare ETFs over healthcare stocks is a great way for risk-averse investors to gain exposure to some of the best-in-class names in the healthcare sector, which include Johnson & Johnson (NYSE:JNJ), Pfizer Inc. (NYSE:PFE), and Moderna, Inc. (NASDAQ:MRNA). This article will look at some of the best performing healthcare ETFs in 2022.

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Our Methodology

We screened for non-leveraged and non-inverse healthcare ETFs to compile this list. We sorted these ETFs based on their year-to-date returns, as of December 8, and picked the highest returning among them. Along with each ETF, we have mentioned its portfolio breakdown, the index it tracks, and its notable holdings. Let’s now look at the best performing healthcare ETFs in 2022.

10 Best Performing Healthcare ETFs in 2022

10. iShares U.S. Healthcare Providers ETF (NYSEARCA:IHF)

YTD Return as of December 9: -4.67%

The iShares U.S. Healthcare Providers ETF (NYSEARCA:IHF) is down 4.67% for the year, outperforming the S&P 500 by roughly 13%, as of December 9. The fund is one of the best performing healthcare ETFs in 2022 and uses a representative sampling technique to mirror the performance of the Dow Jones U.S. Select Health Care Providers Index. The fund has an expense ratio of 0.39% and yields 0.59%. The fund pays out dividends on a quarterly basis.

The iShares U.S. Healthcare Providers ETF has 74 holdings and a top ten holdings concentration of 76.52%. Among its most prominent holdings is Cigna Corporation (NYSE:CI). As of December 9, Cigna Corporation (NYSE:CI) has returned 41.81% year to date and is offering a dividend yield of 1.35%.

On November 23, Morgan Stanley analyst Erin Wright raised his price target on Cigna Corporation to $347 from $318, after taking coverage of the name, and remained Overweight on the shares.

As of September 30, Glenview Capital is the top investor in Cigna Corporation and has a position worth $538.27 million.

Here is what Aristotle Atlantic Partners, LLC had to say about Cigna Corporation in its third-quarter 2022 investor letter:

“Cigna Corporation (NYSE:CI) outperformed the S&P 500 Index in the third quarter, as the company reported what we view as solid second quarter results driven by a better-than-expected medical loss ratio. The company continues to be aggressive with share repurchases and we believe the defensive nature of Cigna’s business continues to be attractive during the ongoing macroeconomic uncertainty.”

9. Fidelity MSCI Health Care Index ETF (NYSEARCA:FHLC)

YTD Return as of December 9: -4.57%

The Fidelity MSCI Health Care Index ETF (NYSEARCA:FHLC) has an expense ratio of 0.08% and a trailing twelve-month yield of 1.33%. The fund tracks the performance of the MSCI USA IMI Health Care 25/50 Index and employs a representative sampling technique. The fund has lost 4.57% year to date, as of December 9, and is among the best performing healthcare ETFs in 2022.

The Fidelity MSCI Health Care Index ETF has a top ten holdings concentration 47.97% and has 438 holdings. Eli Lilly and Company (NYSE:LLY) is one of the top holdings of the fund. The stock has surged 32.85% year to date, as of December 9, and is yielding 1.09%.

This December, UBS analyst Colin Bristow raised his price target on Eli Lilly and Company to $428 from $407 and reiterated a Buy rating on the shares.

At the close of Q3 2022, Fisher Asset Management was the dominant investor in Eli Lilly and Company. The fund’s stakes in the company were valued at $1.26 billion.

Here is what ClearBridge Investments had to say about Eli Lilly and Company in its third-quarter 2022 investor letter:

“In the U.S., we initiated a position in pharmaceutical maker Eli Lilly (NYSE:LLY) as it brings out new drug candidates for diabetes and Alzheimer’s disease. New drugs impact diabetes but have also demonstrated significant weight loss for patients who are overweight and have other co-morbidity issues as a result. Lilly is one of the two key players in diabetes care and we believe the potential market opportunity is much higher than the consensus forecasts as we are seeing evidence of accelerating adoption.”

By investing in healthcare ETFs, investors can gain exposure to leading players in the space such as Johnson & Johnson, Pfizer Inc., and Moderna, Inc..

8. iShares Global Healthcare ETF (NYSEARCA:IXJ)

YTD Return as of December 9: -3.74%

The iShares Global Healthcare ETF (NYSEARCA:IXJ) employs a representative sampling technique to mirror the returns of the S&P Global 1200 Health Care Index. As of December 9, the fund has lost 3.74% year to date and has outperformed the S&P 500 by roughly 14%. The fund is one of the best performing healthcare ETFs in 2022.

The iShares Global Healthcare ETF has an expense ratio of 0.40% and pays out dividends semiannually. The fund has a yield of 1.20%. The iShares Global Healthcare ETF has 133 holdings and a top ten holdings concentration of 41.55%. Among the fund’s top ten holdings, we have Merck & Co., Inc..

As of December 9, Merck & Co., Inc. has returned 41.51% to investors so far in 2022 and is trading at a PE multiple of 18x. On November 17, Credit Suisse analyst Trung Huynh took coverage of Merck & Co., Inc. with an Outperform rating and a $120 price target.

As of September 30, Ken Fisher’s Fisher Asset Management is the largest investor in Merck & Co., Inc. and has a position worth $1.03 billion in the company.

Here is what Chartwell Investment Partners had to say about Merck & Co., Inc. in its second-quarter 2022 investor letter:

“In the Dividend Equity accounts, the three best performers in Q2 includes Merck (NYSE:MRK, 3.6%), up 12.0%. Merck, like other pharma companies, is in a defensive business, but the stock also did well as peak-sales estimates for their flagship drug, Keytruda, have gone up (JPMorgan estimates $32 billion in sales by 2026).”

7. iShares U.S. Healthcare ETF (NYSEARCA:IYH)

YTD Return as of December 9: -3.60%

The iShares U.S. Healthcare ETF (NYSE:IYH) has an expense ratio of 0.39% and is yielding 1.08% on a quarterly basis. The fund makes use of a representative sampling technique to track the performance of the Russell 1000 Health Care RIC 22.5/45 Capped Index. As of December 9, the fund has fallen by 3.60% year to date, outperforming the S&P 500 by over 14%. The fund is one of the best performing healthcare ETFs in 2022.

The iShares U.S. Healthcare ETF has 116 holdings and a top ten holdings concentration of 53.87%. Among its top ten holdings, we have Bristol-Myers Squibb Company. As of December 9, Bristol-Myers Squibb Company has gained 27.39% year to date and is offering a dividend yield of 2.74%.

On November 17, Credit Suisse analyst Trung Huynh took coverage of Bristol-Myers Squibb Company with a Neutral rating and a $78 price target.

At the close of Q3 2022, Pzena Investment Management was the dominant shareholder in Bristol-Myers Squibb Company and held stakes worth $283.8 million in the company.

Here is what RGA Investment Advisors had to say about Bristol-Myers Squibb Company in its third-quarter 2022 investor letter:

“Bristol-Myers Squibb Company (NYSE:BMY), which we referenced above, boasts a double digit free cash flow yield that gets divided roughly equally between repurchases, a dividend and M&A in what is the best environment for acquisitions perhaps ever. In 2019, BMY acquired Celgene, who had one of the better corporate development programs in the industry. We view this as a great outlet for us as generalists considering a company like BMY should truly thrive with the ability to acquire outstanding assets and science at depressed valuations. We touched on the Turning Point acquisition above and we expect the company to be increasingly active in the M&A landscape. Importantly, Celgene also came to BMY with a phenomenal CAR-T platform. CAR-T is a cell therapy that activates the body’s immune system to target cancers. This will be a key growth vector alongside M&A in overcoming the company’s patent cliff.”

6. Simplify Health Care ETF (NYSEARCA:PINK)

YTD Return as of December 9: -2.93%

The Simplify Health Care ETF (NYSEARCA:PINK) has lost 2.93% so far in 2022 and is placed on our list of the best performing healthcare ETFs. The fund uses a fundamental analysis with bottom-up stock picking approach to compile its portfolio. The Simplify Health Care ETF has an expense ratio of 0.50% and is offering a dividend yield of 0.40%. The fund pays out dividends on a quarterly basis.

The Simplify Health Care ETF has 60 holdings and a top ten holdings concentration of 49.89%. Among the fund’s top holdings we have UnitedHealth Group Inc. (NYSE:UNH). As of September 30, GQG Partners is the largest shareholder in UnitedHealth Group Inc. (NYSE:UNH) and has disclosed a position worth $1.63 billion.

This December, Credit Suisse analyst A.J. Rice raised his price target on UnitedHealth Group Inc. to $610 from $590 and maintained an Outperform rating on the shares. As of December 9, the stock has gained 7.35% year to date and is offering a forward dividend yield of 1.22%.

Here is what Aristotle Atlantic Partners, LLC had to say about UnitedHealth Group Incorporated in its third-quarter 2022 investor letter:

“UnitedHealth Group Incorporated (NYSE:UNH) is a leading U.S. health insurer offering a variety of plans and services to group and individual customers nationwide. Its health benefits segment manages health maintenance organization, preferred provider organization and point-of-service plans, as well as Medicare, Medicaid, state-funded, and supplemental vision and dental options. In addition, UnitedHealth Group’s Optum health services units—OptumHealth, OptumInsight and OptumRx—provide wellness and care management programs, financial services, information technology solutions, and pharmacy benefit management services to individuals and the health care industry. We believe UnitedHealth Group is well-positioned as a leader in commercial and government insurance markets with a broad complimentary service offering through Optum Health. As one of the largest health care payers and providers, we believe the company has unique insights and scale to continue to evolve the health care delivery process and drive above industry profitability and growth. We believe UnitedHealth Group’s track record of financial strength and stability warrants a premium in share valuation.”

Some of the major players in the global healthcare industry include UnitedHealth Group Incorporated, Johnson & Johnson, Pfizer Inc., and Moderna, Inc..

5. Invesco Dynamic Pharmaceuticals ETF (NYSEARCA:PJP)

YTD Return as of December 9: -2.29%

As of December 9, the Invesco Dynamic Pharmaceuticals ETF (NYSEARCA:PJP) has lost 2.29% year to date and has outperformed the S&P 500 by over 15%. The fund ranks among the best performing healthcare ETFs in 2022. The fund tracks the performance of the Dynamic Pharmaceutical Intellidex Index and uses a full replication technique. The fund has an expense ratio of 0.56% and pays out dividends on a quarterly basis. The fund has a yield of 0.97%.

The Invesco Dynamic Pharmaceuticals ETF has 28 holdings and a top ten holdings concentration of 59.03%. Among the fund’s notable holdings, we have AbbVie Inc. (NYSE:ABBV). On November 17, Credit Suisse analyst Trung Huynh took coverage of AbbVie Inc. (NYSE:ABBV) with an Outperform rating and a $170 price target.

As of September 30, Arrowstreet Capital is the top shareholder in AbbVie inc. (NYSE:ABBV). The fund’s stakes are valued at $431.6 million in the company.

Here is what Baron Funds had to say about AbbVie Inc. in its third-quarter 2022 investor letter:

“AbbVie Inc. (NYSE:ABBV) is a drug developer best known for Humira, an immunosuppressant that is the best selling drug of all time. Given outsized key product risk (patent cliff and generic launches beginning in 2023), AbbVie has broadened its pipeline, highlighted by its Allergan acquisition. Shares fell on results that missed consensus and indications that legacy franchises were outperforming newer product launches, calling into question AbbVie’s long-term strategy. With promising assets in the pipeline and its robust cash flow profile, we believe AbbVie will grow well into the future.”

4. Health Care Select Sector SPDR Fund (NYSEARCA:XLV)

YTD Return as of December 9: -0.95%

The Health Care Select Sector SPDR Fund (NYSEARCA:XLV) is offering a yield of 1.42% and has an expense ratio of 0.11%. The fund mirrors the returns of the Health Care Select Sector Index and employs a full replication technique. As of December 9, the Health Care Select Sector SPDR Fund has lost 0.95% year to date and is part of the best performing healthcare ETFs in 2022.

The Health Care Select Sector SPDR Fund has 66 holdings and a top ten holdings concentration of 55.03%. Johnson & Johnson (NYSE:JNJ) is one of the top holdings of the Health Care Select Sector SPDR Fund. At the close of Q3 2022, Ken Fisher’s Fisher Asset Management was the largest investor in Johnson & Johnson and disclosed a position worth $967.2 million in the company.

This December, Morgan Stanley analyst Terence Flynn raised his price target on Johnson & Johnson to $178 from $170 and maintained an Equal Weight rating on the shares. As of December 9, the stock has gained 2.45% year to date and is offering a yield of 2.57%.

Here is what Distillate Capital Partners LLC had to say about Johnson & Johnson in its second-quarter 2022 investor letter:

“Johnson & Johnson was among the 2 largest trims at around 1% each. Each stock was up 1% in the quarter compared to the 16% price decline for the S&P 500 and the positions were reduced as the valuations became somewhat less appealing, though still attractive enough to warrant inclusion.”

3. Virtus LifeSci Biotech Products ETF (NYSEARCA:BBP)

YTD Return as of December 9: 0.66%

The Virtus LifeSci Biotech Products ETF (NYSEARCA:BBP) has gained 0.66% so far in 2022, as of December 9, and is ranked high among the best performing healthcare ETFs in 2022. The fund uses a full replication technique to track the returns of the LifeSci Biotechnology Products Index. The fund has an expense ratio of 0.79%.

The Virtus LifeSci Biotech Products ETF has 54 holdings and a top ten holdings concentration of 29.34%. One of the fund’s most notable holdings is Biogen Inc. (NASDAQ:BIIB), which has gained 16.89% year to date as of December 9. On December 1, Atlantic Equities analyst Steve Chesney raised his price target on Biogen Inc. (NASDAQ:BIIB) to $295 from $220 and reiterated a Neutral rating on the shares.

As of September 30, Steven Cohen’s Point72 Asset Management is the largest shareholder in Biogen Inc.. The fund’s stakes are valued at $448 million.

Here is what ClearBridge Investments had to say about Biogen Inc. in its third-quarter 2022 investor letter:

“Biogen Inc. (NASDAQ:BIIB) was the leading contributor among several biopharma names, boosted by positive, pivotal clinical data for its next-generation Alzheimer’s treatment Lecanemab. In a pivotal trial, the drug proved safe and efficacious in slowing progression of Alzheimer’s disease.”

2. VanEck Pharmaceutical ETF (NASDAQ:PPH)

YTD Return as of December 9: 2.08%

The VanEck Pharmaceutical ETF (NASDAQ:PPH) uses a full replication technique to track the returns of the MVIS US Listed Pharmaceutical 25 Index. The fund has gained 2.08% year to date, as of December 9, and has outperformed the S&P 500 by roughly 20%. The fund ranks among the best performing healthcare ETFs in 2022 and has an expense ratio of 0.35%.

The VanEck Pharmaceutical ETF has 26 holdings and a top ten holdings concentration of 57.65%. Among the fund’s most prominent holdings we have Pfizer Inc. (NYSE:PFE). As of September 30, AQR Capital Management is the top investor in Pfizer Inc. and has a position worth $467.5 million in the company.

On November 17, Credit Suisse analyst Trung Huynh started coverage of Pfizer Inc. with an Outperform rating and a $55 price target.

Here is what Diamond Hill Capital had to say about Pfizer Inc. in its third-quarter 2022 investor letter:

“Also among our bottom contributors were health care products manufacturer Abbott Labs, global pharmaceutical company Pfizer Inc., media and technology giant Alphabet, and insurance company American International Group (AIG). Although Pfizer continues to report strong performance of its core drugs, sales of its COVID vaccine and treatment have likely peaked and sales are expected to decline going forward. We remain optimistic about the company long term as we believe management is taking the company in the right direction, focusing R&D, and making strategic acquisitions with profits generated from COVID vaccine sales.

1. First Trust Nasdaq Pharmaceuticals ETF (NASDAQ:FTXH)

YTD Return as of December 9: 3.37%

The First Trust Nasdaq Pharmaceuticals ETF (NASDAQ:FTXH) is ranked high among the best performing healthcare ETFs in 2022. The fund has gained 3.37% year to date, as of December 9, and has outperformed the S&P 500 by over 20%. The fund has an expense ratio of 0.60% and a yield of 1.09%. The fund mirrors the returns of the Nasdaq US Smart Pharmaceuticals Index and employs a full replication technique.

The First Trust Nasdaq Pharmaceuticals ETF has 30 holdings and a top ten holdings concentration of 64.28%. One the fund’s top ten holdings is Amgen, Inc. (NASDAQ:AMGN). This December, Oppenheimer analyst Jay Olson raised his price target on Amgen, Inc. (NASDAQ:AMGN) to $310 from $300 and reiterated an Outperform rating on the shares.

At the close of Q3 2022, Two Sigma Advisors was the dominant investor in Amgen, Inc. and disclosed a position worth $379.4 million in the company.

Here is what Smead Capital Management had to say about Amgen Inc. in its third-quarter 2022 investor letter:

“Two things are very noticeable right off the top. First, sometimes you have to be happy losing less in a bear market environment so that you have more of your capital to grow in the next bull market. We are never really happy losing money. Second, 2022 is likely to be our third year of existence as a fund to lose money for the year. This year would join 2008 and 2018 in this undistinguished category. Our biggest detractors was dominated by Amgen (NASDAQ:AMGN). Consumer/investor fears about media and e-commerce hit WBD and EBAY and profit taking in Amgen came from early 2022 strength.”

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