What is the best healthcare ETF in Canada?

Since Canada has very few pure healthcare stocks, the best options are globally diversified healthcare ETFs. iShares Global Healthcare ETF (XHC) on the TSX is the most popular Canadian-listed option. For US-listed with lower MERs, Vanguard Health Care ETF (VHT) and Health Care Select Sector SPDR (XLV) are excellent choices. Harvest Healthcare Leaders Income ETF (HHL) offers higher yield through a covered call strategy.

Why doesn't Canada have many healthcare stocks?

Canada's universal healthcare system means most healthcare spending is government-funded, leaving less room for private healthcare companies compared to the US. The Canadian stock market is dominated by financials, energy, and materials. For healthcare exposure, Canadians typically buy US or global healthcare ETFs that hold companies like Johnson & Johnson, UnitedHealth, Pfizer, and Eli Lilly.

Are healthcare ETFs a good long-term investment?

Healthcare is considered a defensive, long-term growth sector. An aging global population drives increasing healthcare demand. The sector has historically grown faster than GDP and held up well during recessions since people need medical care regardless of economic conditions. However, healthcare is subject to regulatory and political risk, particularly around drug pricing and patent expirations.

How do I buy US healthcare ETFs like VHT from Canada?

You can buy US-listed healthcare ETFs (VHT, XLV, IBB) through any Canadian discount broker like Questrade, Wealthsimple Trade, Interactive Brokers, or the big bank brokerages. You will need to convert CAD to USD first. For tax efficiency, hold US-listed ETFs in your RRSP to avoid the 15% US dividend withholding tax.

What healthcare ETF has exposure to GLP-1 obesity drugs?

Any broad healthcare ETF like XHC, VHT, or XLV will include Eli Lilly and Novo Nordisk — the two leaders in GLP-1 drugs (Ozempic, Wegovy, Mounjaro). These stocks have surged due to obesity drug demand. In XHC, Eli Lilly and Novo Nordisk together represent ~15% of the portfolio.

Should I hold healthcare ETFs in TFSA or RRSP?

For Canadian-listed healthcare ETFs (XHC, HHL), TFSA is fine. For US-listed ETFs (VHT, XLV), RRSP is more tax-efficient because RRSP accounts are exempt from the 15% US dividend withholding tax under the Canada-US tax treaty. TFSA does not get this exemption.

Best Healthcare ETFs in Canada (2026)

If you want the broader ETF framework before adding a healthcare tilt, start with our ETFs and index funds hub.

Key takeaways:

Canada lacks pure-play healthcare stocks due to universal government healthcare — most exposure comes from US or global ETFs.
XHC (TSX) is the most popular Canadian-listed healthcare ETF with 0.72% MER.
VHT and XLV (US-listed) offer much lower MERs (0.09-0.10%) but require USD conversion.
HHL (TSX) uses a covered call strategy for ~7.5% yield — popular with income investors.
Healthcare is a defensive sector benefiting from aging demographics and GLP-1 drug innovation.
Hold US-listed healthcare ETFs in RRSP to avoid US dividend withholding tax.

Best Healthcare ETFs Listed on the TSX

ETF	Ticker	MER	Yield	Holdings	Distribution	Strategy
iShares Global Healthcare	XHC	0.72%	~1.0%	100+	Semi-annual	Global healthcare (US-heavy)
Harvest Healthcare Leaders Income	HHL	0.45%	~7.5%	20	Monthly	Top healthcare, covered call overlay
TD Global Healthcare Leaders	THC	0.65%	~0.5%	30+	Annual	Actively managed global healthcare
Evolve Global Healthcare Enhanced Yield	LIFE	0.45%	~6.0%	20	Monthly	Healthcare leaders, covered call

Best US-Listed Healthcare ETFs (Accessible from Canada)

If you plan to buy the US-listed versions, pair this page with best account type for US stocks and ETFs in Canada and Norbert’s Gambit.

ETF	Ticker	MER	Yield	Holdings	AUM	Focus
Vanguard Health Care	VHT	0.10%	~1.3%	400+	$18B+	Broad US healthcare
Health Care Select Sector SPDR	XLV	0.09%	~1.5%	60	$40B+	S&P 500 healthcare
iShares Biotechnology	IBB	0.44%	~0.2%	250+	$7B+	Biotech focused
iShares Global Healthcare	IXJ	0.40%	~1.5%	100+	$5B+	Global healthcare
ARK Genomic Revolution	ARKG	0.75%	0%	30+	$2B+	Genomics and biotech innovation
SPDR S&P Biotech	XBI	0.35%	~0.5%	140+	$6B+	Equal-weight biotech

Healthcare Sector Breakdown

Sub-Sectors Within Healthcare ETFs

Sub-Sector	Weight (Typical)	Examples	Growth Driver
Pharmaceuticals	25–30%	Eli Lilly, Pfizer, Merck	Drug pipelines, patent portfolios
Healthcare equipment	15–20%	Abbott, Medtronic, Stryker	Medical device innovation
Managed care	15–20%	UnitedHealth, Elevance, Cigna	US insurance market
Biotechnology	15–20%	Amgen, Gilead, Regeneron	Gene therapy, oncology
Life sciences tools	10–15%	Thermo Fisher, Danaher	Lab equipment, genomics
Healthcare facilities	5–10%	HCA Healthcare	Hospital networks

Top Holdings in Global Healthcare ETFs

Company	Ticker	Sub-Sector	Weight (XHC)	Market Cap
Eli Lilly	LLY	Pharma — GLP-1 drugs	~10%	$800B+
UnitedHealth Group	UNH	Managed care	~8%	$500B+
Johnson & Johnson	JNJ	Diversified healthcare	~6%	$400B+
AbbVie	ABBV	Pharma — immunology	~5%	$350B+
Novo Nordisk	NVO	Pharma — GLP-1 drugs (Danish)	~5%	$400B+
Merck	MRK	Pharma — oncology	~4%	$300B+
Thermo Fisher Scientific	TMO	Life sciences tools	~3%	$200B+
Abbott Laboratories	ABT	Medical devices, diagnostics	~3%	$200B+
Pfizer	PFE	Pharma	~2%	$150B+
Amgen	AMGN	Biotech	~2%	$150B+

Canadian Healthcare Stocks

Limited pure-play options available on the TSX:

Company	Ticker	Sub-Sector	Market Cap	Notes
Bausch Health	BHC	Pharma	$5B+	Restructuring, high debt
Jamieson Wellness	JWEL	Consumer health	$2B+	Vitamins and supplements
CannTrust / cannabis	Various	Cannabis	Varies	Not traditional healthcare
Neighbourly Pharmacy	NBLY	Pharmacy retail	$500M+	Community pharmacies
Well Health Technologies	WELL	Health tech	$1B+	Digital clinics

Most Canadians get healthcare exposure through global/US ETFs rather than domestic stocks.

Healthcare ETF Performance Comparison

ETF	1-Year	3-Year (Annualized)	5-Year (Annualized)	MER
VHT (US healthcare)	~8%	~5%	~10%	0.10%
XLV (S&P 500 healthcare)	~10%	~6%	~11%	0.09%
XHC (Global healthcare, TSX)	~7%	~4%	~8%	0.72%
IBB (Biotech)	~5%	~2%	~6%	0.44%
HHL (Covered call)	~12%	~8%	~9%	0.45%

Past performance does not guarantee future results.

Why Healthcare Is a Long-Term Growth Sector

That is why healthcare often works better as a sector tilt inside a growth portfolio than as a standalone portfolio replacement. Compare best growth ETFs in Canada.

Driver	Detail
Aging population	Global 65+ population doubles by 2050 — healthcare spending increases with age
Innovation	GLP-1 drugs, gene therapy, AI diagnostics, robotic surgery
Inelastic demand	People need healthcare regardless of economy — defensive sector
Emerging markets	Healthcare spending rising rapidly in developing countries
Obesity drugs	GLP-1 market projected to exceed $100B by 2030
Government spending	Healthcare is the largest government expenditure in most countries

Risks

Risk	Detail
Drug pricing regulation	US, Canada, EU may cap prices — compressing pharma margins
Patent cliffs	Brand-name drugs lose exclusivity — revenue drops when generics enter
Clinical trial failures	Biotech companies can crash on single trial failure
Political risk	Elections and policy changes affect healthcare policy unpredictably
Concentration	Top 10 holdings often represent 50%+ of capitalization-weighted ETFs
US-centric	Most healthcare ETFs are 60–70% US companies
Higher MER (TSX-listed)	Canadian-listed healthcare ETFs charge 0.45–0.72%, vs 0.09–0.10% US-listed

Portfolio Allocation

Investor Profile	Healthcare Allocation	Suggested ETF
Core index holder (already owns XEQT)	0% (already included)	N/A — ~10% healthcare in XEQT
Wants sector tilt	5–10%	XHC or VHT
Income-focused	5–10%	HHL or LIFE
Aggressive growth	5–10% (biotech tilt)	IBB or XBI

Tax Optimization

Account	Best For
RRSP	US-listed ETFs (VHT, XLV, IBB) — no US dividend withholding
TFSA	Canadian-listed (XHC, HHL) — avoid US withholding tax
Non-registered	Either — US withholding recoverable via foreign tax credit

For the treaty logic behind that account choice, see US dividend withholding tax in RRSP Canada and US dividend withholding tax in TFSA Canada.