The integration of artificial intelligence (AI) in the U.S. healthcare industry, including cancer research, has witnessed a rapid acceleration in recent years, which has transformed clinical practice, diagnostics, and operational efficiency across hospitals and providers. While this rapid integration bears a few crucial challenges, like a lack of robust data governance and regulatory frameworks for patient safety and privacy, no one can deny the immense benefit AI has been providing across every area of health care, from personalized medicine to automated workflows.
In 2024, North America contributed approximately 44.7% of global market revenue for AI in oncology, per a report by the Morder Intelligence firm. This statistic reflects how deep-rooted a growth catalyst AI has become for the American cancer research market, and a positive outlook for the healthcare sector created by its widespread adoption, as is evident from the improved performance of several major healthcare ETFs this year compared to their 2024 performance. This trend is poised to continue with the latest federal action providing a targeted boost to a critical area of the oncology market.
A Presidential Push for Pediatric Cancer & ETF Landscape
On Sept. 30, 2025, President Donald Trump signed an executive order that doubled the U.S. National Institutes of Health’s investment in a childhood cancer data initiative, launched during Trump’s first term, with an additional $50 million. The order recognizes pediatric cancer as the leading cause of disease-related death for American children. It seeks to harness American AI innovation to reverse this trend by improving data infrastructure, enhancing the analysis of complex biological systems, and designing better clinical trials.
No doubt this executive order lays a crucial groundwork for further boosting healthcare ETF performance, especially for funds exposed to pediatric cancer innovation. Healthcare companies such as Johnson & Johnson, Merck, Eli Lily and Boston Scientific—which already play significant roles in pediatric cancer therapies and have adopted AI-driven diagnostics — should benefit. Consequently, healthcare ETFs, like Vanguard Health Care ETF (VHT) and iShares Global Healthcare ETF (IXJ), with heavy exposure to these companies, should witness improved performance in the coming days.
Healthcare ETFs in Focus
A confluence of factors, including strong M&A activity, a wave of high-impact pharmaceutical and medical device product launches, favorable demographic tailwinds from an aging U.S. population with elevated healthcare utilization, and increased use of AI in healthcare, are boosting healthcare ETFs in 2025 over their 2024 performance.
Given these factors, combined with the recent executive order on pediatric cancer and AI innovation, it makes sense to put the spotlight on healthcare ETFs that have significant exposure to U.S. companies advancing in these areas.
Vanguard Health Care ETF (VHT)
This fund provides exposure to U.S. companies that manufacture healthcare equipment and supplies or that provide healthcare-related services, and companies that are primarily involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products. Its top three holdings are in U.S.-based pharmaceutical and biotechnology companies- Eli Lily (10.16%), AbbVie (5.38%) and Johnson & Johnson (5.07%), all of which are involved in pediatric cancer research.
VHT rose 1% in 2024 and are up 2.3% so far this year. The fund charges 9 basis points (bps) as fees.
iShares Global Healthcare ETF (IXJ)
This fund offers exposure to pharmaceutical, biotechnology and medical device companies. Its top three holdings are in Eli Lily (8.21%), Johnson & Johnson (6.21%) and AbbVie (5.60%).
IXJ lost 1.1% in 2024 but has soared 3.1% so far this year. The fund charges 40 bps as fees.
SPDR S&P Biotech ETF (XBI)
This fund provides exposure to a broad range of companies in the biotechnology sector. Its top three holdings constitute U.S.-based biotechnology companies Exelixis Inc. (1.97%) and United Therapeutics (1.96%) both of which are involved in pediatric cancer research and support.
XBI inched up 0.7% in 2024 but has surged 11.3% so far this year. The fund charges 35 bps as fees.
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Vanguard Health Care ETF (VHT): ETF Research Reports SPDR S&P Biotech ETF (XBI): ETF Research Reports iShares Global Healthcare ETF (IXJ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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