CANC vs IHI

Key Takeaways

• Tema Oncology ETF (CANC) is an actively managed thematic fund targeting oncology-focused companies worldwide, while iShares U.S. Medical Devices ETF (IHI) is a passive fund tracking a U.S. medical devices index.
• CANC offers concentrated exposure to cancer therapeutics and related biotech with 58 holdings and a net expense ratio of 0.75%, compared to IHI’s broader 46 holdings in medical equipment and lower 0.38% expense ratio.
• Both ETFs provide healthcare sector exposure but differ in strategy, with CANC emphasizing global oncology innovation and IHI focusing on established U.S. device manufacturers and distributors.
• CANC’s higher cost reflects active management and thematic specialization, whereas IHI’s lower cost and passive structure support broad market-cap-weighted exposure within medical devices.
• Structural differences in holdings concentration and geographic scope create distinct risk profiles, with CANC potentially more volatile due to biotech concentration and IHI offering relative stability through established device firms.
• Investors comparing these ETFs should weigh thematic growth potential against cost efficiency and diversification within the broader healthcare landscape.

Introduction

Both the Tema Oncology ETF (CANC) and the iShares U.S. Medical Devices ETF (IHI) target segments of the healthcare sector but pursue different strategies. CANC focuses on oncology through active selection, while IHI provides passive exposure to U.S. medical device companies. They do not compete directly but offer complementary or alternative approaches for investors seeking healthcare growth tied to innovation, demographics, and medical advancements. This comparison highlights structural distinctions relevant for portfolio positioning in the current market environment.

Tema Oncology ETF (CANC) Overview

The Tema Oncology ETF (CANC) is an actively managed exchange-traded fund launched in 2023 that seeks long-term growth by investing at least 80% of assets in publicly listed companies deriving at least 50% of revenues from oncology. It holds approximately 58 securities selected through a bottom-up approach. Top holdings typically include Revolution Medicines Inc., Eli Lilly & Co., Cogent Biosciences Inc., Novartis AG, and Roche Holding AG. The fund maintains a global scope with significant allocations to healthcare, particularly biotech and pharmaceuticals. Its net expense ratio stands at 0.75%, reflecting active management. CANC rebalances as needed based on manager discretion rather than a fixed schedule, distinguishing it as a thematic active vehicle within the oncology niche.

iShares U.S. Medical Devices ETF (IHI) Overview

The iShares U.S. Medical Devices ETF (IHI) is a passively managed fund launched in 2006 that seeks to track the performance of the Dow Jones U.S. Select Medical Equipment Index. The index comprises U.S. equities involved in manufacturing and distributing medical devices such as diagnostic equipment, surgical instruments, and prosthetics. IHI typically holds around 46 securities on a market-cap-weighted basis. Prominent holdings often include Abbott Laboratories, Intuitive Surgical Inc., Stryker Corp., Medtronic PLC, and Edwards Lifesciences Corp. All exposure remains within the U.S. medical devices sector. The expense ratio is 0.38%, consistent with its passive structure. The fund follows the index’s rebalancing methodology and offers quarterly distributions.

Industry and Thematic Backdrop

The healthcare sector encompasses both oncology innovation and medical device advancements, driven by aging populations, technological progress, and evolving treatment paradigms. Oncology benefits from breakthroughs in targeted therapies and immunotherapies, while medical devices gain from minimally invasive procedures and diagnostic improvements. Macroeconomic factors such as interest rate expectations and healthcare spending trends influence both areas. Regulatory developments around drug approvals and device clearances, along with capital flows into biotech and medtech, shape opportunities. Sector risks include clinical trial outcomes, reimbursement pressures, and competitive intensity within healthcare innovation cycles.

Performance and Positioning Comparison

In recent market cycles, the two ETFs have exhibited differing performance dynamics tied to their underlying exposures. CANC’s active oncology focus has aligned with periods of biotech momentum and positive clinical data from top holdings, though it has shown higher volatility characteristic of concentrated thematic strategies. IHI has delivered more stable returns during broader healthcare rotations, benefiting from steady demand for established medical devices amid earnings consistency from large-cap holdings. Relative positioning reflects sector rotation between innovation-driven biotech and defensive device manufacturers, with interest rate sensitivity and earnings cycles of key companies influencing short- to medium-term outcomes.

AI Screener

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Tickeron AI Verdict

Based on observable structural factors, Tickeron’s AI would currently assign a modest preference to the iShares U.S. Medical Devices ETF (IHI) due to its lower expense ratio, passive index-tracking approach, and broader diversification across established U.S. medical device leaders. These attributes support cost efficiency and relative stability. The Tema Oncology ETF (CANC) presents compelling thematic exposure to oncology innovation but carries higher costs and concentration risks typical of active strategies. The choice ultimately depends on an investor’s risk tolerance and conviction in oncology versus medical devices momentum.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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