ETF in Focus: iShares Global Healthcare ETF (IXJ)

Lydia Vitalis | BlackRock Australia

The technology giants of the US market have dominated recent investor attention, and many Australians now own a significant concentration of them through global share funds. But if more of a portfolio depends on the same AI-led growth story, it may be less diversified than it first appears. 

For investors, that creates a reason to look for other sources of growth alongside technology.

Healthcare can offer a different engine for growth. Its fortunes are driven by demand for medicines and treatments, ageing populations and scientific progress — factors that do not always move in step with the technology cycle.

Broadening the growth opportunity

BlackRock analysis suggests healthcare has historically been less closely tied to AI-linked sharemarket movements than many other sectors¹. That potentially makes it a useful counterweight amid the sharp swings in enthusiasm for AI that we’ve seen so far in 2026. 

At the same time, healthcare is also benefiting from AI: drug research is speeding up, clinicians can access more precise interpretations of scans, and hospitals and manufacturers are operating more efficiently. Meanwhile, new obesity and diabetes treatments, more targeted cancer medicines and advances in cell and gene therapies are opening up opportunities for returns. 

Importantly, innovation is beginning to show up in company results. Over the four quarters to Q2 2026, 64% of MSCI World healthcare companies beat analysts’ earnings-per-share expectations, ahead of information technology at 61%. That was the highest reading among all 11 major equity market sectors.²

Healthcare leads on earnings surprises

Source: FactSet, as of Q2 2026. Share of companies in each MSCI World sector exceeding consensus EPS expectations over the trailing four quarters; as presented in BlackRock research (October 2026).

A more attractive starting point?

Following a period of weaker performance, parts of the healthcare market are also trading at cheaper valuations than their historical averages³. This doesn’t guarantee stronger returns, but it may provide a more attractive starting point if company earnings continue to improve. 

Healthcare faces challenges too — including government policy, medicine pricing, patent expiries and the risk that new treatments do not succeed. The key is to gain exposure to a wide range of businesses rather than depend on any single breakthrough.

How IXJ puts healthcare in one ETF

The iShares Global Healthcare ETF (IXJ) tracks the S&P Global 1200 Healthcare (Sector) Capped Index, providing access to more than 100 global healthcare companies through one ASX-listed ETF.

Around 45% of the index is allocated to pharmaceuticals, with the balance across medical equipment, biotech, healthcare providers, life sciences and other businesses⁴. That means exposure to established sector leaders as well as areas of emerging innovation, without having to pick the next winning drug or device.

Where IXJ may fit

For investors who already own broad Australian or global share funds, IXJ provides a dedicated healthcare allocation alongside their existing investments. This can broaden exposure to different companies and sources of growth, including healthcare opportunities that are less available in the Australian market. 

Of course, it’s important to note that IXJ is a single-sector equity investment, not a replacement for a diversified portfolio, and individual share prices, changes in regulation and currency movements can all affect returns.

Still, with its exposure to AI adoption, broader innovation and attractive valuations, we see a renewed role for healthcare in portfolios. The sector offers its own long-term growth story - allowing investors to capitalise on tech-driven productivity gains, alongside a broader wave of medical innovation that is changing the way we treat many serious chronic diseases.