Investors looking for exposure to biotech have two very different options from the same fund family. The Invesco Nasdaq Biotechnology ETF (IBBQ -2.77%) spreads its bets across 251 companies and charges low fees, while the Invesco Biotechnology & Genome ETF (PBE -1.73%) takes a concentrated, quant-driven approach with just 31 holdings and offers a higher dividend yield.
Snapshot (cost & size)
| Metric | PBE | IBBQ |
|---|---|---|
| Issuer | Invesco | Invesco |
| Expense ratio | 0.58% | 0.19% |
| 1-year return (as of Aug. 19, 2026) | 47.97% | 59.61% |
| Dividend yield | 1.73% | 0.80% |
| Beta | 0.79 | 0.62 |
| AUM | $282.0 million | $76.5 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
IBBQ is the cheaper option, with 0.19% expense ratio compared to 0.58% for PBE. However, income seekers may prefer PBE's higher 1.73% dividend yield, which is more than twice IBBQ's 0.80% yield.
Performance & risk comparison
| Metric | PBE | IBBQ |
|---|---|---|
| Max drawdown (5 yr) | (37.84%) | (37.94%) |
| Growth of $1,000 over 5 years (total return) | $1,301 | $1,439 |
What's inside
Launched in 2021, IBBQ tracks a broad basket of 251 companies, allocating at least 90% of its capital to the Nasdaq Biotechnology Index. Its largest positions include Amgen (AMGN -1.95%) at 8.6%, Vertex Pharmaceuticals (VRTX -2.14%) at 8%, and Gilead Sciences (GILD -2.82%) at 7.3%.
PBE, in contrast, focuses on a much narrower set of 31 U.S.-based companies, typically allocating 90% of its assets to the Dynamic Biotech & Genome Intellidex Index. The benchmark selects components by evaluating price momentum, earnings growth, and company management. PBE's largest positions include Regeneron Pharmaceuticals (REGN -1.69%) at 5.4%, Amgen at 5.2%, and CareDx (CDNA +1.03%) at 5%. PBE was launched in 2005.
Despite holding roughly eight times as many companies, IBBQ is actually the more top-heavy of the two: its top three holdings make up about 24% of the fund, versus roughly 16% for PBE's top three. In other words, IBBQ's larger holdings count doesn't fully translate into reduced concentration risk -- it still leans heavily on a handful of megacap biotechs at the top.
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Which looks like the better buy
For most investors, IBBQ's combination of broad diversification and a low 0.19% expense ratio probably makes it the more sensible core holding -- though its broad holdings count is a bit deceiving. Spreading exposure across 251 companies helps cushion the blow when any single drug trial or FDA decision goes sideways -- and in biotech, those binary events happen often. But with roughly 24% of the fund concentrated in its top three names, a stumble at any one of these top holdings will still have an outsize impact on the fund. The biotech sector has been in the headlines a lot lately, with GLP-1 competition, a wave of M&A among mid-cap drugmakers, and looming patent cliffs for several blockbuster therapies all shaping which companies win and lose.
PBE's appeal is narrower. Its quant-driven process leans into momentum and earnings growth, and its smaller, more concentrated portfolio currently offers a bigger dividend yield -- currently 1.73%, more than double what IBBQ pays. That's notable for income-focused investors, since biotech ETFs aren't typically known for offering a meaningful yield. Counterintuitively, even with its 31-company portfolio, PBE 's top three holdings make up about 16% of the fund -- which is less top-heavy than IBBQ. So the "concentrated" label applies more to PBE's total holdings count than to single-stock risk at the top. And with an expense ratio more than triple IBBQ's, investors are paying more to own a much smaller basket of stocks.
For long-term investors seeking broad, low-cost exposure to healthcare innovation, IBBQ is probably the better fit. For those willing to pay up for a more selective, income-tilted approach, PBE offers a reasonable alternative -- as long as they're comfortable with the added concentration risk.
Buying IBBQ or PBE makes the most sense for investors with a specific, deliberate view on biotech as a theme. Investors who are newer to investing, or who'd rather not actively manage their own sector exposure, may be just as well served by a plain S&P 500 index fund -- which already includes Amgen, Vertex, Gilead, and Regeneron, among other large biotech and pharma names.
