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Investing in healthcare stocks

Learn the benefits and risks of investing in pharmaceuticals, biotech, health insurance and more.

The healthcare sector is large and complex. Investors must be wary of governmental regulations and political shifts before allocating funds.

What are healthcare stocks?

Healthcare stocks belong to the healthcare sector of the stock market — one of 11 sectors defined by the Global Industry Classification Standard. Companies within the healthcare sector provide medical services, including insurance, medical equipment and pharmaceuticals.
The healthcare sector is large, accounting for nearly one-fifth of the overall gross domestic product (GDP) within the US. The healthcare sector is also complex, given government and professional licensing regulations, research costs and the rapid evolution of the medical field.

What subcategories does it include?

The healthcare sector can be further divided into the following major industries:

  • Healthcare facilities. These include hospitals, clinics, laboratories, mental health facilities and nursing homes.
  • Health insurance. Companies responsible for providing and underwriting health insurance policies also belong to the healthcare sector.
  • Medical equipment. Medical equipment providers design and manufacture equipment used across the sector, from CT scanners to surgical gloves.
  • Pharmaceuticals. Biotech firms and major pharmaceutical firms work to research, develop and distribute generic and name-brand drugs.

How to invest in the healthcare sector

There are two ways to invest in the healthcare sector: individual stocks or exchange-traded funds (ETFs). Individual stocks offer targeted investment opportunities but have limited market exposure. Sector-tracking ETFs are more diverse and less risky than individual stocks but are accompanied by expense ratios.
Before you can invest, you’ll need a brokerage account. Here’s how the investment process works:

  1. Pick a platform. Online brokerages are plentiful, so conduct your own research to find the platform best suited to your investment goals.
  2. Open an account. If you opt for a web-based brokerage account, you can complete the application process online.
  3. Fund your account. Before you can purchase securities, fund your account with an external transfer.
  4. Select your securities. Search for stocks and ETFs by sector using your platform’s research tools.
  5. Place an order. Once you’ve found a security you’d like to purchase, indicate how many you’d like to buy and submit your order.
  6. Monitor your investments. Log in to your brokerage account to track your investments.

Top pick for stock bonuses

  • Trade stocks, options, ETFs, mutual funds, alternative asset funds
  • $0 commission on stocks, ETFs and options with no options contract fees
  • Get up to $1,000 in stock when you open and fund a new account within 45 days
  • Access to a financial planner
Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease.

Terms and conditions apply*. For 401k rollovers, existing SoFi IRA members must complete 401k rollovers via this link For SoFi members without a SoFi IRA, a SoFi IRA must first be opened, and 401k rollover must be completed utilizing Capitalize via this link. SoFi and Capitalize will charge no additional fees to process a 401(k) rollover to a SoFi IRA. SoFi is not liable for any costs incurred from the existing 401k provider for rollover. Please check with your 401k provider for any fees or costs associated with the rollover. For IRA contributions, only deposits made via ACH and cash transfer from SoFi Bank accounts are eligible for the match. Click here for the 1% Match terms and conditions.

Up to 2% match

  • Trade stocks, ETFs, options, futures and bonds all in one place
  • $0 commissions on stocks, ETFs and equity options, with low contract fees
  • Deposit or transfer $10,000+ to earn a 2% Match Bonus. Plus: Get a $100 transfer fee reimbursement on your first brokerage transfer of $2,000 or more. T&C apply.

Top pick for intuitive trading tools

  • Trade $0 commission stocks, ETFs, futures and options with as little as $1
  • After-hours trading available
  • Earn 3.75% interest on uninvested cash with Gold
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What stocks are in the healthcare sector?

See how the following stocks are performing, and view details like market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield.

What ETFs track the healthcare sector?

Popular ETFs in the healthcare sector include:

  • ARK Genomic Revolution ETF (ARKG)
  • Fidelity MSCI Health Care Index ETF (FHLC)
  • First Trust Amex Biotechnology Index (FBT)
  • Health Care Select Sector SPDR Fund (XLV)
  • Invesco S&P SmallCap Health Care ETF (PSCH)
  • iShares Nasdaq Biotechnology ETF (IBB)
  • iShares U.S. Healthcare ETF (IYH)
  • iShares U.S. Medical Devices ETF (IHI)
  • SPDR S&P Biotech ETF (XBI)
  • VanEck Vectors Biotech ETF (BBH)
  • Vanguard Healthcare ETF (VHT)

Why invest in healthcare stocks?

Healthcare is a human necessity. This means the demand for healthcare services typically remains unchanged, regardless of how other industries rise and fall. Investing in well-established healthcare stocks can provide a cushion of security in an aggressive-growth portfolio.
Healthcare stocks also offer investors the opportunity to fund medical research. As the field continues to expand, investors can support research efforts seeking to cure disease.

What unique risks does the healthcare sector face?

The medical field is complicated, and if you don’t understand what a company does or how it operates, you may want to think twice before investing.
Government legislation is another major consideration for healthcare investors. Sweeping shifts in policy — the Affordable Care Act, for example — have the power to trigger significant volatility in this sector. And the FDA has the power to make or break fledgling pharmaceutical companies. If you choose to invest in this sector, keep an eye on political shifts and regulatory changes.

Compare stock trading platforms

To purchase stocks or ETFs, you’ll need a brokerage account. Use this table to compare your options and find the right fit.

12 of 12 results
Finder Score Available asset types Stock trade fee Minimum deposit Cash sweep APY bullet point infobox
Finder score
Stocks, Bonds, Options, Mutual funds, ETFs, CDs
$0.01
$250
2.83%
Leverage powerful trading tools and low margin rates to trade stocks, options, ETFs, mutual funds and bonds.
Finder score
Stocks, Options, ETFs, Cryptocurrency, Futures, Event contracts, High-yield cash account
$0
$0
3.50%
Get a free stock when you successfully sign up and link your bank account. T&Cs apply.
Trade stocks, options, crypto and more, with advanced trading tools, fractional shares and exclusive perks for Gold members.
Finder score
Stocks, Bonds, Options, ETFs, Cryptocurrency, Investments, Retirement, Treasury Bills, High-yield cash account
$0
$0
3.6%
Get up to $10,000 and transfer fees covered when you move your portfolio to Public. T&Cs apply.
Build a diversified portfolio of stocks, bonds, options, ETFs and crypto, with a high-yield cash account and options contract rebates.
Important information
*Yield as of 04/09/2025. Learn more.
SoFi Wealth Management logo
Finder score
Finder score
Stocks, Options, Mutual funds, ETFs, Alternatives
$0
$0
0.01%
Get up to $1,000 in stock when you open and fund a new account. T&Cs apply.
Trade stocks, ETFs, and options with zero commissions, invest in IPOs or automate your portfolio, with exclusive perks available through SoFi Plus.
Important information
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees. Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA (www.finra.org) /SIPC(www.sipc.org). There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see https://www.sofi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information SoFi Plus members can schedule an unlimited number of appointments with a financial planner during periods in which the SoFi Plus member meets the eligibility criteria set forth in section 10(a) of the SoFi Plus Terms and Conditions. SoFi members who are not members of SoFi Plus can schedule one (1) appointment with a financial planner. The ability to schedule appointments is subject to financial planner availability. SoFi reserves the right to change or terminate this benefit at any time with or without notice. Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease Robo Advisor: Automated investing is offered through SoFi Wealth LLC, an SEC-registered investment adviser. 0.25% fee is based on your account value. The wrap program fee may cost more or less than purchasing brokerage, custodial, and record keeping services separately. Terms and conditions apply*. For 401k rollovers, existing SoFi IRA members must complete 401k rollovers via this link For SoFi members without a SoFi IRA, a SoFi IRA must first be opened, and 401k rollover must be completed utilizing Capitalize via this link. SoFi and Capitalize will charge no additional fees to process a 401(k) rollover to a SoFi IRA. SoFi is not liable for any costs incurred from the existing 401k provider for rollover. Please check with your 401k provider for any fees or costs associated with the rollover. For IRA contributions, only deposits made via ACH and cash transfer from SoFi Bank accounts are eligible for the match. Click here for the 1% Match terms and conditions.
Webull logo
Finder score
Finder score
Stocks, Bonds, Options, ETFs, Futures, Money market funds
$0
$0
3.60%
Deposit or transfer $100,000+ to earn a 4% Match Bonus, or $2,000+ to earn a 3% Match Bonus. Plus: Get a $100 transfer fee reimbursement on your first brokerage transfer of $2,000 or more. T&Cs apply.
Trade stocks, ETFs and equity options commission-free, with access to futures, advanced charting tools, a robo-advisor and event trading powered by Kalshi.
Interactive Brokers logo
Finder score
Finder score
Stocks, Options, Mutual funds, ETFs, Cryptocurrency
$0
$0
3.83% Lite
4.83% Pro
Trade in a simulated trading environment and access a wide range of tradable assets.
eToro logo
Finder score
Finder score
Stocks, Options, ETFs, Cryptocurrency, Investments
$0
$0
3.75%
No commission stock, ETF and options trades, with 3.9% interest on your options account balance and no options contract fees. See full disclosure.
Important information
eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finder is not an affiliate and may be compensated if you access certain products or services offered by the BD.
Acorns logo
Finder score
Finder score
Stocks, ETFs
$0
$0
N/A
Get a $20 bonus when you set up an account and make your first recurring investment (min. $5). T&Cs apply.
Automate investing with recurring contributions starting at $5 and invest spare change from everyday purchases.
Stash Investments LLC logo
Finder score
Finder score
Stocks, ETFs
$0
$0
0.1%
Get $5 when you sign up and deposit $5. T&Cs apply.
Bank, automate your portfolio or invest in individual stocks and ETFs for as low as $3 per month.
Important information
Investment advisory services offered by Stash Investment LLC, a SEC registered investment advisor. Investing involves risk and investments may lose value. Holdings and performance are hypothetical. *Offer is subject to T&Cs
Wealthfront logo
Finder score
Finder score
Stocks, ETFs, High-yield cash account
$0
$500
3.75%
Get a $50 bonus when you sign up and fund a taxable automated investing account with at least $500. T&Cs apply.
Automate your stock and bond portfolio or trade individual stocks for as little as $1 apiece. Plus, earn 3.50% APY on your cash.
JPMorgan logo
Finder score
Finder score
Mutual funds, ETFs
$0
$25,000
N/A
Financial planning, advice and portfolio management. T&Cs apply.
Get ongoing access to an advisory team with personalized financial planning and expert-built portfolios. Provider terms & conditions apply
Important information
INVESTMENT PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE.
M1 Finance logo
Finder score
Finder score
Stocks, ETFs, Cryptocurrency
$0
$100
4.00%
Build a custom portfolio of stocks and ETFs with automatic rebalancing. Plus, earn 4.00% APY with a high-yield cash account.
Important information
M1 Finance, LLC does not charge commission, trading, or management fees for self-directed brokerage accounts. You may still be charged other fees such as M1’s platform fee, regulatory fees, account closure fees, or ADR fees. For a complete list of fees M1 may charge visit M1 Fee Schedule. M1 is not a bank. M1 Spend is a wholly-owned operating subsidiary of M1 Holdings Inc.. M1 High –Yield Savings Accounts are furnished by B2 Bank, NA, Member FDIC. Obtaining stated APY (annual percentage yield) with the M1 High-Yield Savings Account does not require a minimum account balance. Stated APY is accrued on account balance. APY is solely determined by M1 Spend LLC and its partner banks, and will include account fees that will reduce earnings. Rates are subject to change without notice. M1 High-Yield Savings Account is a separate offering from, and not linked to, the M1 High-Yield Cash Account offered by M1 Finance, LLC. M1 is not a bank.
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What is the Finder Score?

The Finder Score crunches 147 key metrics we collected directly from 18+ brokers and assessed each provider’s performance based on nine different categories, weighing each metric based on the expertise and insights of Finder’s investment experts. We then scored and ranked each provider to determine the best brokerage accounts.

We update our best picks as products change, disappear or emerge in the market. We also regularly review and revise our selections to ensure our best provider lists reflect the most competitive available.

Read the full Finder Score breakdown

Bottom line

The healthcare sector offers the opportunity for profit but carries its own unique set of risks. Whether or not this sector belongs in your portfolio depends on your risk tolerance and investment goals. Explore your brokerage account options across multiple trading platforms for the account best suited to your needs.

Frequently asked questions

Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.

Finder is not an advisor or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.

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Editor

Shannon Terrell is a lead writer and spokesperson at NerdWallet and a former editor at Finder, specializing in personal finance. Her writing and analysis on investing and banking has been featured in Bloomberg, Global News, Yahoo Finance, GoBankingRates and Black Enterprise. She holds a bachelor’s degree in communications and English literature from the University of Toronto Mississauga. See full bio

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has written 74 Finder guides across topics including:
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