Pharmaceutical and Biotech ETFs Show Diverging Returns and Costs

Comparing pharmaceutical and biotechnology exchange-traded funds (ETFs) highlights differences in recent performance, costs, and risk characteristics based on verified data from mid-2026.

The iShares U.S. Pharmaceuticals ETF (IHE) delivered a total return between 53.7% and 57.3% over the past year as of mid-2026. The fund’s gross and net expense ratios are reported to be in the range of 0.37% to 0.38%, making it a lower-cost option among sector ETFs.

The Invesco Biotechnology & Genome ETF (PBE) achieved a return of approximately 42.5% over the same period, as of June 30, 2026. PBE’s expense ratio is around 0.58%, which is higher than IHE’s, reflecting differences in fund structure and management approach.

PBE uses a quantitative, multi-factor screening strategy that tracks the Dynamic Biotech & Genome Intellidex Index. This approach can result in higher risk due to concentrated exposure to select biotechnology companies, according to published fund information.

What the numbers show

• IHE’s one-year total return: 53.7%–57.3% as of mid-2026.
• PBE’s one-year return: about 42.5% as of June 30, 2026.
• Expense ratio: IHE at 0.37%–0.38%, PBE at approximately 0.58%.

Biotechnology ETFs, such as PBE, generally experience higher volatility compared to pharmaceutical ETFs. Factors contributing to this volatility include regulatory developments, clinical trial outcomes, and uncertainties related to patents, as outlined in regulatory disclosures.

Pharmaceutical ETFs like IHE are typically characterized by lower volatility and more stable returns. This stability is attributed to the business models and revenue streams of established pharmaceutical companies, according to sector overviews.

Expense ratios are a key consideration for investors comparing these funds. IHE’s lower expense ratio may appeal to cost-conscious investors, while PBE’s higher ratio reflects its specialized strategy and index methodology.

Both funds have delivered positive returns over the past year, but their risk profiles and cost structures differ. These distinctions are important for investors evaluating sector-focused ETF options in the healthcare industry.

* This article is based on publicly available information at the time of writing.