2025 was a tumultuous year for the global healthcare sector. For much of the year, policy uncertainty, particularly around U.S. drug pricing and trade barriers, weighed heavily on valuations, which reached near 30-year lows (as mentioned by a BlackRock report). 

However, a dramatic shift occurred in the final quarter. The sector rebounded strongly, led by defensive rotation and a key resolution — President Trump's "Most Favored Nation" executive order spurred major drug companies to negotiate pricing deals with the White House, clearing a significant cloud of uncertainty. 

Notably, global healthcare exchange-traded funds (ETFs) saw their largest monthly inflows in five years during November 2025, attracting $6.8 billion, signaling renewed investor confidence. Resultantly, iShares Global Healthcare ETF (IXJ Quick QuoteIXJ - Free Report) , which tracks the S&P 1200 Global Healthcare Index, returned 12% in the three months to November 2025, significantly ahead of its long-run average annual return of 6% since inception. 

This "reset" in valuations has created a compelling background, positioning 2026 as a major comeback year for investors looking to capture high-quality growth at a discount. 

For investors, this turning point presents a timely opportunity to gain strategic exposure to the sector through healthcare ETFs.

Key Catalysts to Drive the Global Healthcare Sector in 2026

Several powerful, converging factors are expected to propel the global healthcare sector forward:

Resolved Policy Uncertainty and Trade Dynamics: The "Most Favored Nation" framework has moved from uncertainty to action. Major pharmaceutical companies have negotiated deals centered on preferential Medicaid pricing and domestic manufacturing expansion, with the U.S. government offering tariff relief in exchange. This stability allows companies and investors to focus on fundamentals rather than regulatory risk. 

Furthermore, a reinforced "America First" agenda is incentivizing firms like Eli Lilly (LLY Quick QuoteLLY - Free Report) and AstraZeneca (AZN Quick QuoteAZN - Free Report) to reshore manufacturing to the United States, shielding their supply chains from global trade wars and creating a more resilient domestic industry.

Also, new trade pacts like those between America and the UK — capping tariffs at 15% — are expected to stabilize import costs. 

Demographic and Innovation Mega-Forces: Long-term demographic trends remain a powerful tailwind. Aging populations in developed economies, particularly the United States, are expected to drive consistent demand for healthcare services and chronic disease management. 

Simultaneously, a wave of innovation is creating massive new markets. Breakthroughs like GLP-1 drugs for obesity and diabetes, next-generation cancer therapies, and AI-driven diagnostics and administrative tools are not just scientific advances but significant economic opportunities.

Technological Transformation: Artificial Intelligence is moving from experimentation to enterprise-wide adoption across the healthcare value chain. AI is being deployed to reduce administrative burdens, automate clinical documentation, accelerate drug discovery, and personalize patient care, which can lead to improved efficiency, cost savings and better health outcomes.

The Outlook: 2026 and Beyond

The outlook for the global healthcare sector remains bright, supported by powerful secular tailwinds, although certain critical challenges remain. 

To this end, it is imperative to mention that according to Deloitte Global’s 2026 Health Care Outlook Survey, when asked about the health care industry overall, 72% of executives surveyed in nations across Australia, Canada, Germany, the Netherlands, and the United Kingdom said they were upbeat about the year ahead, with 1% having a negative view. 

They have expressed concern about the U.S. healthcare sector in particular, partly due to uncertainties regarding tariffs, drug pricing and regulatory changes.  

Looking beyond 2026, the global healthcare sector is projected to undergo a dramatic transformation by 2030, driven by technology, consumer demand and economic necessity. The market is anticipated to approach nearly $30 trillion, with AI influencing over 30% of it, representing an $868 billion opportunity in revenue gains and cost savings (as per a report by PWC).

Healthcare ETFs to Buy

Given the aforementioned discussion, strategic exposure through the following healthcare ETFs represents a prudent way to capture the sector’s long-term growth potential while mitigating risks tied to any single company or sub-industry. For investors looking to position their portfolios for 2026 and beyond, these funds offer diversified access across pharmaceuticals, biotechnology, medical devices and healthcare services:

Vanguard Health Care ETF (VHT Quick QuoteVHT - Free Report)

This fund, with net assets worth $17.3 billion, provides exposure to 417 companies that manufacture health care equipment and supplies or that provide health care-related services, and those that are primarily involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products. 

VHT has rallied 16.4% over the past year. The fund charges 9 basis points (bps) as fees. 

State Street Health Care Select Sector SPDR ETF (XLV Quick QuoteXLV - Free Report)

This fund, with AUM worth $41.66 billion, provides exposure to 60 pharmaceuticals; health care equipment and supplies; health care providers and services; biotechnology; life sciences tools and services; and health care technology companies. 

XLV has risen 15.2% over the past year. The fund charges 8 bps as fees. 

iShares Global Healthcare ETF (IXJ Quick QuoteIXJ - Free Report)  

This fund, with net assets worth $4.64 billion, provides exposure to 114 pharmaceutical, biotechnology and medical device companies. 

IXJ has gained 16.3% over the past year. The fund charges 40 bps as fees.