Vanguard Health Care ETF Outperforms VanEck Biotech on Returns, Yield, and Fees
2026-07-28 12:20
•Jake Lerch •The Motley Fool
•••• •••••••• Axe Capital view
Healthcare ETFs: What South African Investors Should Consider
Vanguard’s broad healthcare ETF beats biotech-focused rivals, but local links matter for JSE investors.
The Vanguard Health Care ETF (VHT) has outperformed the VanEck Biotech ETF (BBH) over five years, thanks to lower fees, higher dividends, and less volatility. For South African investors, the lesson isn’t just about US healthcare. While biotech’s thrill appeal (BBH) is clear, it’s riskier and costlier. VHT’s broad exposure, including giants like Johnson & Johnson and AbbVie, offers steadier returns that could appeal even in a rand-hedged play. A local angle? Prosus has some portfolio overlap with global tech-health platforms and could indirectly benefit from steady healthcare innovation trends embedded in VHT. Meanwhile, banks like Standard Bank and Nedbank remain sensitive to rand moves (USD/ZAR) influenced by global risk sentiment—meaning a steadier foreign healthcare exposure might balance local currency and market swings. If the rand strengthens, it could dampen offshore returns, though. I’m watching VHT as a stable anchor in offshore equities, avoiding biotech’s rollercoaster for now. this is just my opinion and not financial advice
Buy offshore healthcare exposure via low-fee ETFs like VHT for diversification and steadier yield. Avoid concentrated biotech ETFs, which carry higher costs and volatility. Use rand strength as an opportunity to increase offshore holdings.
- VHT
- USD/ZAR
- Prosus
- Rand appreciation reducing offshore returns
- Biotech innovation surprises shifting market risk appetite
6/10
Vanguard Health Care ETF (VHT) outperforms VanEck Biotech ETF (BBH) with lower fees (0.09% vs 0.35%), higher dividend yield (1.6% vs 0.5%), and superior 5-year returns ($1,278 vs $1,004 on $1,000 invested). VHT offers broad diversification across 411 healthcare holdings, while BBH provides concentrated biotech exposure with 25 stocks and higher volatility.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Jake Lerch
Categories: Rates, Equities, Capital Returns, Healthcare
Tickers: VHT, BBH, LLY, JNJ, ABBV, AMGN, GILD, VRTX
Sentiment: Mixed - VHT is presented as the superior choice with lower expense ratio (0.09%), higher dividend yield (1.6%), better 5-year returns ($1,278 vs $1,004), lower maximum drawdown (17.7% vs 39.9%), and broader diversification across 411 holdings. Recommended for traditional investors seeking steady performance. BBH underperforms VHT across multiple metrics: higher expense ratio (0.35%), lower dividend yield (0.5%), weaker 5-year returns, higher volatility (beta 0.68), and significantly larger maximum drawdown (39.9%). Suitable only for aggressive investors willing to accept higher risk and fees.
Keywords: healthcare ETF, biotech ETF, expense ratio, dividend yield, diversification, volatility, performance comparison
Insights:
- VHT: Positive: VHT is presented as the superior choice with lower expense ratio (0.09%), higher dividend yield (1.6%), better 5-year returns ($1,278 vs $1,004), lower maximum drawdown (17.7% vs 39.9%), and broader diversification across 411 holdings. Recommended for traditional investors seeking steady performance.
- BBH: Negative: BBH underperforms VHT across multiple metrics: higher expense ratio (0.35%), lower dividend yield (0.5%), weaker 5-year returns, higher volatility (beta 0.68), and significantly larger maximum drawdown (39.9%). Suitable only for aggressive investors willing to accept higher risk and fees.
- LLY: Neutral: Mentioned as a major holding in VHT (14.19% of portfolio). No independent sentiment expressed; included as context for fund composition.