Investing in ASX healthcare ETFs

Introducing ASX healthcare ETFs

ASX healthcare ETFs are exchange-traded funds listed on the ASX that invest in healthcare companies. They are generally designed to track the performance of a specific healthcare sector index, such as the S&P/ASX 200 Health Care Index (ASX: XHJ), which covers healthcare service providers, medical equipment companies, pharmaceuticals, and biotechnology.

Healthcare has become one of the more closely watched corners of the ASX ETF market. Within the ASX 200, healthcare stocks make up approximately 10% of the index¹, and investor interest is growing. Much of this interest is underpinned by strong structural tailwinds. The AI in healthcare market alone is projected to grow from $39 billion in 2025 to $504 billion by 2032², while ageing populations and the shift toward preventative and digital care are expected to drive sustained long-term demand.

The sector is also widely regarded as defensive — healthcare has historically posted positive returns in every calendar year over the past decade where global equity markets were negative.

What does the healthcare sector include?

The healthcare sector is broad and complex and includes a diverse range of companies that provide medical products and services. Here, we explore some of the sub-sectors.

• Pharmaceuticals: Speciality pharmacies are projected to grow at an 8% CAGR through 2028, driven by oncology, immunology, and neurology. GLP-1 drugs (weight-loss/diabetes treatments) have become a major growth driver in the industry.
• Biotechnology: Biotech has seen increased M&A and IPO activity, and clinical trial success rates have been rising, making it one of the more dynamic sub-sectors right now. Worth noting gene therapies and cell therapies as growing areas, as cell and gene therapies are expanding with total spending potentially reaching $28 billion by 2030 — roughly three times 2021 levels.
• Medical devices and equipment: Those involved in manufacturing and distributing medical equipment and devices such as surgical instruments, diagnostic imaging equipment, and implantable devices.
• Healthcare service providers: These include hospitals, clinics, nursing homes, and home healthcare providers.
• Healthcare IT: While Telemedicine and electronic health records are the foundation and still highly relevant, AI is now the dominant theme. Healthcare services and technology (HST) venture capital investment reached $11.9 billion in 2025. The current wording undersells how much this sub-sector has evolved.
• Health insurance providers: Facing major headwinds into 2026, health insurers have faced earnings pressure following post-pandemic utilisation increases and major changes across Medicare Advantage, Medicaid, and ACA, with industry margins now at breakeven or negative in several segments. The current description presents it neutrally, which is fine, but readers might benefit from a note that it's been under pressure.

Healthcare is considered a defensive sector, as demand for healthcare products and services tends to remain relatively stable during economic downturns or market volatility. 

What are ETFs?

Exchange-traded funds (ETFs) are investment funds that trade on stock exchanges like individual shares. They hold a basket of underlying assets, such as shares, bonds, or commodities, and often aim to replicate the performance of a specific index or asset class. 

Exchange-traded funds are a cost-effective way to diversify a portfolio and offer investors easy access to various assets.

ETFs have gained in popularity over the last couple of decades. There are now more than 200 listed on the ASX, providing exposure to everything from gold to biotechnology companies. This makes ETFs an economical way of investing in specific industries and investment themes. 

Where do international funds come in?

Most healthcare ETFs in Australia have a global focus, meaning they invest in international healthcare companies, not just those listed on the ASX. 

This makes healthcare ETFs an excellent way to gain exposure to the global healthcare sector. It provides additional diversification because holdings are spread geographically and between individual companies.  

There are also many healthcare ETFs listed on stock exchanges outside Australia. Investing in international ETFs requires an account with a brokerage that offers access to global markets. It also means your investment will be exposed to changes in currency exchange rates which will impact how much your investment is worth. 

Top healthcare ETFs 

Some ASX healthcare ETFs, such as Betashares Global Healthcare ETF (ASX: DRUG), have broad global exposure. It seeks to track the performance of the Nasdaq Global ex-Australia Healthcare Index and exposes investors to companies in the pharmaceuticals, biotechnology, medical equipment, and healthcare services sectors. 

Others offer exposure to specific healthcare sectors. For instance, the VanEck Vectors Australian Biotech ETF (ASX: ACURE) focuses on Australian biotechnology companies. 

iShares Global Healthcare ETF

The iShares Global Healthcare ETF (ASX: IXJ) seeks to track the investment results of the S&P Global 1200 Healthcare Sector Index, which comprises leading healthcare companies from developed markets around the world.

It provides broad exposure across pharmaceuticals, biotechnology, and medical devices, with holdings including Johnson & Johnson (NYSE: JNJ), Merck & Co Inc (NYSE: MRK), and Pfizer Inc (NYSE: PFE). This makes it a diversified option for investors seeking global healthcare exposure through a single ASX-listed ETF.

Vaneck Vectors Global Healthcare Leaders

The VanEck Global Healthcare Leaders ETF (ASX: HLTH), managed by VanEck, tracks the MarketGrader Developed Markets (ex-Australia) Health Care Index. This index selects around 50 healthcare companies from developed markets (excluding Australia) based on a growth-at-a-reasonable-price (GARP) methodology.

The ETF focuses on fundamentally strong companies with attractive growth characteristics, with holdings including Moderna Inc (NASDAQ: MRNA), Novo Nordisk, and Sonova Holding. It offers a more concentrated and style-driven approach compared to broader healthcare ETFs.

Betashares Digital Health and Telemedicine ETF 

The BetaShares Global Digital Health ETF (ASX: EDOC), offered by BetaShares, provides exposure to companies at the forefront of healthcare innovation. It tracks the NASDAQ CTA Global Digital Health Index, which includes businesses involved in digital health technologies such as telemedicine, healthcare analytics, and connected medical devices.

Key holdings include DexCom Inc (NASDAQ: DXCM), Resmed Inc (ASX: RMD), and Masimo Corp (NASDAQ: MASI). This ETF may appeal to investors looking for targeted exposure to the fast-growing digital health segment within the broader healthcare sector.

How to invest in ETFs in Australia

Investing in ETFs in Australia is relatively straightforward. Investors can buy and sell ETFs on the Australian Securities Exchange, just like ordinary shares, using a stockbroker or online trading platform. To get started, you'll need to choose a brokerage provider and open an account, which typically involves verifying your identity and linking a bank account.

Once your account is set up, the next step is to research ETFs listed on the ASX and select those that align with your investment goals, time horizon, and risk tolerance. Key factors to consider include the ETF's underlying index, fees (management expense ratio), performance history, and level of diversification. It's also worth checking liquidity and bid–ask spreads, as these can impact trading costs.

After selecting an ETF, you can place a buy order through your broker's platform using the ETF's ticker code, choosing between a market order (executed immediately at the current price) or a limit order (executed at a specified price). Once invested, it's important to monitor your holdings periodically — reviewing performance, distributions, and any changes to the fund — to ensure they remain aligned with your broader portfolio and investment strategy.

Pros of investing in healthcare ETFs

Diversification: Healthcare ETFs invest in various companies within the healthcare sector, providing investors with diversification and reducing their exposure to any single company.

Growth potential: The healthcare sector is considered a growth sector due to factors such as an aging population, increasing demand for healthcare services, and technological advancements. As a result, healthcare ETFs may have the potential for long-term growth.

Low cost: ETFs are typically low-cost investment vehicles with lower fees than mutual funds. This makes them a cost-effective way to invest in the healthcare sector.

Accessible: ETFs trade on stock exchanges just like individual stocks, making them easy to buy and sell anytime during trading hours.

And the cons

Regulatory risk: The healthcare sector is highly regulated and subject to changes that can impact company returns. 

Concentration risk: Some healthcare ETFs may be heavily invested in a small number of companies or a particular subsector of the healthcare industry, which can increase concentration risk.

Stock-specific risks: individual companies within the sector can be impacted by clinical trial results, patent expirations, drug pricing reforms, or other company-specific events. 

Market fluctuations: Like all investments, healthcare ETFs can be impacted by market fluctuations and economic conditions, which can cause their value to decrease.

Are ASX healthcare ETFs right for you?

Whether ASX healthcare ETFs are a good investment depends on your investment goals, risk tolerance, and time horizon. 

If you're looking for a way to gain exposure to the healthcare sector, ASX healthcare ETFs can offer diversification, low fees, and exposure to a stable and growing sector. 

However, before investing in any ETF, it's essential to do your research and investigate whether a potential investment fits your goals and timelines.