Plenty of funds provide exposure to the healthcare landscape, but often each one does so at via a very different path. The iShares U.S. Pharmaceuticals ETF (IHE -1.05%) offers low-cost, targeted exposure to domestic drugmakers, while Simplify Health Care ETF (PINK -0.20%) provides an actively managed, pro-bono strategy with broader healthcare sub-sector reach.

While the iShares fund relies on a passive index of established pharmaceutical giants, the Simplify fund utilizes an active manager to identify growth opportunities across the healthcare spectrum. This comparison explores how these differing methodologies impact cost, performance, and portfolio composition.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The iShares U.S. Pharmaceuticals ETF is the more affordable option, carrying an expense ratio of 0.38% compared to the 0.51% charged by the Simplify Health Care ETF. Investors seeking income may prefer the iShares fund, which currently offers a higher dividend yield.

Performance & risk comparison

What's inside

Simplify Health Care ETF focuses on long-term capital appreciation by investing in 58 innovative healthcare companies across a range of market capitalizations. Its portfolio is composed of about 90% healthcare and 10% industrials, with its largest positions including Purecycle Technologies (PCT -0.16%) at 10.26%, United Therapeutics Corp (UTHR -2.30%) at 7.32%, and Novo Nordisk (NVO +0.41%) at 6.67%. Launched in 2021, the fund has paid $0.16 per share over the previous 12 months and utilizes a currency hedge. A unique feature of this actively managed fund is its pro bono mission, “Shares for the Cure,” which pledges all net profits for annual donations to the Susan G. Komen Foundation.

In contrast, iShares U.S. Pharmaceuticals ETF allocates 100% of its assets to the healthcare sector, specifically targeting domestic pharmaceutical firms. Launched in 2006, it holds 58 stocks and has paid $1.49 per share over the trailing 12 months. Its largest positions include Eli Lilly (LLY -1.24%) at 24.17%, Johnson & Johnson (JNJ -0.34%) at 20.28%, and Royalty Pharma (RPRX -0.27%) at 5.22%. While PINK leans into active management and diverse innovation across biotechnology and medical technology, IHE concentrates heavily on established pharmaceutical leaders and has no specific charitable or currency-hedging quirks.

Which is the better buy?

The pro-bono aspect of the Simplify fund is noble; the fact that the fund manager’s profits go to fight breast cancer is a worthy feature and a legitimate reason for an investor to opt for their healthcare sector portfolio exposure by buying the fund.

But the fund is still more expensive for investors than the iShares Pharmaceutical ETF, at 0.51% for PINK versus 0.38% for IHE. Expenses like that act as a headwind to returns over the long term.

It is worth noting IHE is probably more concentrated in its top names than an investor seeking diversification may like. The fund has nearly 45% of its assets in its top two names and more than 77% in its top 10, compared to nearly 18% and 56% in its top two and 10, respectively, for PINK.

Still, the iShares U.S. Pharmaceuticals ETF has lapped Simplify Health Care ETF the past year, returning more than 42% to about 29%. Those are both excellent returns, but in the first few months of 2026, IHE is really showing its mettle. The iShares fund has returned about 11% year-to-date, compared with a nearly 8% loss for PINK. Such performance gives the iShares U.S. Pharmaceutical ETF the nod for 2026.

For more guidance on ETF investing, check out the full guide at this link.