A powerful rotation into healthcare is taking shape across global markets, with investors pouring money into sector ETFs at one of the fastest clips this year. What started as a cautious move toward defensive stability has quickly morphed into a broader enthusiasm for biotech, pharma and healthcare-services names – helped along by a blockbuster rally in clinical-trial stocks, explosive AI adoption across the industry and Eli Lilly And Co’s (NYSE:LLY) entry into the trillion-dollar club.
Rotation is coming directly at the expense of technology. Funds like Invesco QQQ Trust (NASDAQ:QQQ) are witnessing notable outflows despite their underlying stocks trading near highs. Last week, according to data aggregated by VettaFi, QQQ lost around $3 billion. Investors seem wary of stretching megacap valuations further, particularly with AI expectations inflating faster than earnings.
Healthcare ETFs Lead The Markets
Some of the biggest weekly winners have come from the biotech and health-services corners of the market, according to LSEG Lipper data for the week through Nov 19, as cited by Reuters. Here are some Healthcare and Pharma ETFs whose prices surged last week:
The Virtus LifeSci Biotech Clinical Trials ETF (NYSE:BBC) jumped 6.7%, riding the resurgence of companies advancing Phase 1–3 drug candidates through the pipeline, as tracked by the underlying LifeSci Biotechnology Clinical Trials Index. Its equal-weighted approach gives smaller clinical-stage names meaningful representation.
Backed by fresh interest in genomic medicine and gene-editing platforms, the Franklin Genomic Advancements ETF (BATS:HELX) jumped 5.4%, while the SPDR S&P Health Care Services ETF XHS, which offers exposure to hospital networks, equipment suppliers, insurers and outpatient service providers, rose 4.8%, since such areas tend to enjoy consistent demand irrespective of economic conditions.
Meanwhile, the Simplify Propel Opportunities ETF (NYSE:SURI) advanced 4.4%, lifted by a mix of biotech, pharma, healthcare-tech and life-science innovators that many investors believe remain overlooked relative to AI-hyped tech names. Its concentrated strategy and exposure to niche, high-growth players have made it a natural beneficiary of investors looking for asymmetric upside.
Even broader funds are seeing interest. The Vanguard Health Care ETF (NYSE:VHT), a heavyweight for accessing big pharma, is drawing strong inflows, partly because its top holdings include the very companies reshaping the sector’s growth narrative: Eli Lilly, Johnson & Johnson (NYSE:JNJ), and AbbVie Inc (NYSE:ABBV). The fund drew in around $200 million last week, according to data compiled by VettaFi.
Lilly’s Trillion-Dollar Breakthrough Ignites The Sector
The spark behind some of this excitement is Lilly’s milestone. The company briefly crossed the $1 trillion market cap mark on Nov. 21 — making it the first healthcare company in history to join a club usually occupied by tech giants. Q3 revenues were up by 54%, with triple-digit growth for GLP-1s Mounjaro and Zepbound. Lilly’s raised 2025 sales and earnings outlook has turned it into healthcare’s version of Nvidia.
Its competitive edge, especially the dual-action tirzepatide molecule, is rewriting the expectations for the whole weight loss and metabolic-disease market. ETFs heavy on Lilly exposure, like VHT’s 11.25% weighting, and even more targeted biotech funds, have been among the quiet winners of that momentum.
Also Read: Novo Nordisk’s Stock Slump Shows The GLP‑1 Trade’s Side Effect: ETF Concentration Risk
AI Supercharges Healthcare — And ETF Demand
Unlike in technology, where this enthusiasm increasingly correlates with valuation froth, AI in healthcare can presently demonstrate significant measurable operational and financial impact. The number of strategic pharma-tech partnerships has multiplied:
- Lilly is working with Nvidia to build an "AI Factory" that compresses decades of drug-discovery work into real-time intelligence.
- Johnson & Johnson is using Nvidia’s platforms for robotic-surgery simulations, digital twins, and operating-room AI.
- AbbVie uses Palantir Technologies‘ Foundry to integrate clinical-trial and supply-chain data, reducing costs and expediting the drug development process.
As a result, healthcare ETFs are offering AI exposure — with pricing power, recurring revenues, and clinical validation behind it. That's proving attractive for investors who want AI growth without AI multiples.
Healthcare’s appeal now sits at the intersection of defensiveness, innovation, and tangible earnings momentum-a rare three-in-one package. With biotech returning to form, pharma leaning into AI, and megacap leaders like Lilly rewriting what healthcare multiples can look like, the flows suggest this rotation is far from a temporary safety trade. It’s a recalibration, and healthcare ETFs are the biggest winners.
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