What is an Exchange-Traded Fund (ETF) and how does it differ from a traditional mutual fund?

An ETF is a basket of securities that tracks an index, sector, or asset and trades on a stock exchange throughout the day. Unlike traditional mutual funds, which are bought or sold at the end of the trading day at net asset value, ETFs offer intraday flexibility and can be bought or sold at real-time market prices. They generally provide a cost-effective way to access diversified market exposure, combining features of both stocks and index funds. Investors benefit from transparency regarding holdings, which are typically disclosed daily, making it easier to understand what assets they are actually owning through the fund structure.

How do sector ETFs work and what purpose do they serve in a portfolio?

Sector ETFs focus on specific industries within the equity market, such as healthcare or utilities, rather than broad market indexes. They enable investors to target particular segments of the economy that align with their strategic views or thematic interests. For example, IXJ provides exposure to global healthcare companies, while JXI targets global utilities. These funds serve as tools for investors seeking to capture growth potential in innovative industries or stability from defensive sectors, often used alongside core broad market holdings to achieve a balanced asset allocation strategy.

What is a benchmark index for an ETF and why is it important for investors?

A benchmark index serves as the reference standard against which an ETF's performance is measured. Most sector ETFs aim to replicate the returns of a specific index composed of companies within that sector, such as healthcare or utilities. While the tracking mechanism is crucial, the specific index data is not available for these funds. Understanding this relationship helps investors interpret performance metrics relative to broader markets. However, investors should note that ETF performance is subject to fees and tracking differences that may affect returns compared to the underlying benchmark index over time.

What are the expense ratios for IXJ and JXI, and how do these fees compare?

IXJ has an expense ratio of 0.38%, while JXI has a slightly lower expense ratio of 0.37%. Both fees represent annual costs deducted directly from fund assets to cover management and operational expenses. While JXI's 0.01 percentage point lower cost is marginally more favourable for long-term investors, both ratios are relatively comparable and fall within typical ranges for sector-specific global equity ETFs. These costs directly reduce the fund's net return over time, making even small differences potentially significant for long-term wealth accumulation, though other factors like holdings, risk, and investment objectives should be considered alongside fees.

How does the long-term impact of expense ratios affect investment returns?

Expense ratios directly reduce an investor's returns because fees are deducted from fund assets annually, decreasing the base value upon which future returns compound. For instance, if both IXJ and JXI achieved gross returns of 7% annually, the net return would be slightly different based on their 0.38% and 0.37% expense ratios respectively. Over a 10-year period, this 0.01% difference compounds into a larger gap. Though minimal in the short term, for long-term investors, even small percentage differences significantly affect the final portfolio value, as these fees are charged regardless of whether the fund performs well or poorly in the market environment.

What are the major holdings in IXJ and JXI, and how do the portfolios differ?

IXJ focuses on healthcare companies, with its top holdings including major US pharmaceutical and biotechnology firms like LLY, JNJ, and ABBV. Conversely, JXI targets utilities with holdings such as NEE, SO, and DUK. Both funds offer global exposure, but the specific top-10 holdings reveal a strong tilt towards US companies in healthcare, while JXI includes similar utility sector leaders. Crucially, there is no overlap among the top-10 holdings of these two ETFs. This fundamental difference ensures these funds serve distinct portfolio roles, offering completely separate sector exposures with no duplication of the largest positions between the two ETFs.

Why might investors consider holding IXJ and JXI together rather than choosing just one?

Investors might consider holding both IXJ and JXI to diversify their sector exposures. Healthcare is typically viewed as a growth-oriented sector driven by innovation and demographics, while utilities are considered defensive, providing stability and income through consistent demand. Holding both funds could balance growth potential with defensive characteristics across different market environments. Additionally, since these sectors are economically non-correlated, combining them may help reduce overall portfolio volatility. This approach allows investors to benefit from healthcare's long-term growth trends while utilities provide relative insulation during economic downturns or market turbulence.

What is the minimum investment amount typically required for ETFs like IXJ and JXI?

Unlike some traditional mutual funds that require substantial minimum initial investments, ETFs like IXJ and JXI are purchased in single share units on the stock exchange. Investors need enough funds to purchase at least one share of the ETF, which can range from tens to hundreds of dollars depending on the current share price. Many brokerage firms now offer fractional share trading, allowing investors to purchase dollar amounts rather than whole shares. This accessibility makes ETFs suitable for investors with various budget sizes, enabling them to build diversified portfolios gradually through regular investments without needing large lump sums to get started in the market today.

How do healthcare and utility sectors typically perform during different market cycles?

Healthcare sector companies, represented in IXJ, generally demonstrate resilience during economic downturns because medical services and pharmaceutical products are considered essential regardless of economic conditions. However, healthcare can also benefit during periods of innovation and economic growth. Utilities, found in JXI, are often viewed as defensive investments, performing relatively well during market downturns because electricity, gas, and water are necessities with predictable demand. Yet, utility sector stocks may struggle during periods of rising interest rates, as their bonds are sensitive to rate changes. Understanding these differences helps investors allocate between growth-oriented healthcare and stable utility sectors strategically.

What is the global diversification benefit of ETFs like IXJ and JXI compared to US-only sector funds?

Global sector ETFs like IXJ and JXI provide exposure to companies from multiple countries, not just the US market. This international diversification helps mitigate risk associated with single-country economic conditions or regulatory environments. For example, IXJ includes global healthcare innovators, not just US pharmaceutical giants, while JXI incorporates international utility companies alongside domestic US firms. This approach can potentially enhance returns by capturing growth opportunities in different regional markets. Additionally, global diversification may reduce overall portfolio volatility by spreading investments across economies that might perform differently under various market conditions.

How do market liquidity and net assets affect ETF trading for funds like IXJ and JXI?

Liquidity and net assets are crucial factors affecting ETF trading costs and ease of buying or selling shares. IXJ, with $4.3 billion in net assets, is a larger fund with generally more liquidity, meaning narrower bid-ask spreads and easier trading of larger share quantities. JXI, with $380 million in net assets, is significantly smaller than its healthcare counterpart. Smaller funds might experience wider bid-ask spreads, increasing transaction costs, and potentially have less efficient market making support. Investors should assess these liquidity differences when planning trade sizes and considering how quickly they might need to enter or exit positions without incurring substantial slippage costs in today's market.

How are dividends distributed from ETFs like IXJ and JXI and what is their yield?

ETFs like IXJ and JXI collect dividends from the underlying stocks in their portfolios and distribute them to shareholders periodically, typically quarterly. IXJ provides a 1.40% dividend yield, which is considered moderate, while JXI offers a higher 2.59% yield, making it more attractive to income-focused investors. The dividend yield represents the annual distributions as a percentage of the fund's share price. However, distributions can fluctuate based on the underlying holdings' payout policies and financial performance, and they are not guaranteed. Investors should consider yields in the context of their overall investment strategy and tax situation.

IXJ vs JXI

Two funds, one decision: we compare cost, performance and what each ETF actually holds in October 2026.

Compare iShares Global Healthcare ETF (IXJ) and iShares Global Utilities ETF (JXI). This page examines fees, holdings, dividends and how each fund tracks its market. IXJ has an expense ratio of 0.38% and a 1.40% yield, while JXI has a 0.37% expense ratio and 2.59% yield. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

IXJ

Metric

JXI

0.38%

Expense Ratio

0.37%

1.40%

Dividend Yield

2.59%

$4.32B

Net Assets

$380.14M

133

Holdings

Nov 13, 2001

Inception Date

Sep 12, 2006

–

Index Tracked

–

Health

Fund Category

Utilities

JXI costs about $1.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

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IXJ vs XLV

Compare IXJ and XLV on fees, holdings and dividends. IXJ tracks global healthcare at 0.38%; XLV covers US sector at 0.08%. Review data to assess fit.

IXJ vs VHT

Compare IXJ and VHT on fees, holdings, dividends, tracking. IXJ yields 1.40% with a 0.38% expense ratio; VHT yields 1.49% at 0.09%. See data.

Investment Analysis

IXJ

Pros

Long fund history since 2001 provides a substantial track record for investor analysis.
Diverse global healthcare sector exposure reduces reliance on any single domestic economy.
Strong liquidity is supported by significant net assets of 4.3 billion US dollars.

Considerations

Expense ratio of 0.38 percent is higher than many core broad market equity funds.
Dividend yield of 1.40 percent may be lower than required for income-focused portfolios.
Top holdings concentrate heavily on a few large US pharmaceutical companies.

JXI

Pros

Higher dividend yield of 2.59 percent offers more attractive income generation potential.
Utility sector exposure provides defensive characteristics during certain economic downturns.
Global diversification includes major international utility companies alongside domestic US giants.

Considerations

Net assets of 380 million US dollars indicate significantly smaller fund size than peers.
Expense ratio of 0.37 percent remains relatively high for a sector-specific equity fund.
Inception in 2006 results in a shorter historical track record than comparable healthcare funds.

About IXJ and JXI

IXJ (IXJ)

The iShares Global Healthcare ETF (IXJ) provides investors with broad exposure to the global healthcare sector. This fund tracks an index of healthcare companies across developed and emerging markets, offering a diversified way to invest in pharmaceuticals, biotechnology, and medical devices. With 133 holdings and net assets of USD 4.32 billion, IXJ allows investors to tap into the demographic tailwinds driving healthcare demand worldwide. The fund has an expense ratio of 0.38% and a dividend yield of 1.40%, making it a potentially income-generating component of a diversified portfolio. However, it is important to remember that the healthcare sector can be volatile due to regulatory changes, drug development risks, and market fluctuations. Past performance is not a reliable indicator of future results, and the value of investments can fall as well as rise.

JXI (JXI)

The iShares Global Utilities ETF aims to provide investment results that generally correspond to the price and yield performance of international developed and emerging market utilities. This fund offers broad access to the global utilities sector, which typically includes companies involved in the generation and distribution of electricity, gas, and water. With a low expense ratio of 0.37%, it seeks to help investors diversify their portfolios with a focus on stable, often income-generating assets. The fund holds approximately 91 companies, reflecting a wide array of utility providers worldwide. While it offers a dividend yield of around 2.59%, it is important to remember that values can fluctuate. This ETF is an accessible option for those looking to gain exposure to essential services across global markets.

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IXJ vs JXI

Fund Snapshot

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IXJ vs XLV

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Investment Analysis

IXJ

Pros

Considerations

JXI

Pros

Considerations

About IXJ and JXI

Buy IXJ or JXI in Nemo

Zero Commission

Trusted & Regulated

6% Interest on Cash

Frequently asked questions

What is an Exchange-Traded Fund (ETF) and how does it differ from a traditional mutual fund?

How do sector ETFs work and what purpose do they serve in a portfolio?

What is a benchmark index for an ETF and why is it important for investors?

What are the expense ratios for IXJ and JXI, and how do these fees compare?

How does the long-term impact of expense ratios affect investment returns?

What are the major holdings in IXJ and JXI, and how do the portfolios differ?

Why might investors consider holding IXJ and JXI together rather than choosing just one?

What is the minimum investment amount typically required for ETFs like IXJ and JXI?

How do healthcare and utility sectors typically perform during different market cycles?

What is the global diversification benefit of ETFs like IXJ and JXI compared to US-only sector funds?

How do market liquidity and net assets affect ETF trading for funds like IXJ and JXI?

How are dividends distributed from ETFs like IXJ and JXI and what is their yield?

Fund Snapshot

About IXJ and JXI

Discover More Comparisons

IXJ vs XLV

IXJ vs VHT