SPDR S&P Biotech ETF (XBI -0.47%) is an exchange-traded fund (ETF) that invests in the U.S. biotechnology sector. The ETF is managed by State Street Global Advisors, a global investment management firm that provides services to individuals, institutions, and other clients. SSGA is a subsidiary of State Street Corporation and is headquartered in Boston.
ETFs can enable investors to diversify holdings in various assets like stocks while getting automatic exposure to numerous investments. Instead of purchasing individual shares of the stocks contained in the ETF, you can become part owner of all the assets contained in the fund's portfolio with a single purchase of the ETF's shares.
If you're interested in this biotech ETF, here's what you need to know about how to invest, plus its holdings, dividend, and expense ratio.
What is SPDR S&P Biotech ETF (XBI)?
What is SPDR S&P Biotech ETF (XBI)?
SPDR S&P Biotech ETF (XBI) aims to deliver investment results that generally align with the total return performance of the S&P Biotechnology Select Industry Index.
It has total assets under management of $6.1 billion as of early 2025. The S&P Biotechnology Select Industry Index represents the biotechnology segment of the S&P Total Market Index, which is designed to track the broad U.S. equity market.
This biotech ETF seeks to track a modified equal weighted index, allowing investors broad exposure to a wide collection of companies across the biotech industry. First launched in 2006, the ETF includes biotech industry exposure to large-, mid- and small-cap stocks, providing a greater opportunity for diversification.
Exchange-Traded Fund (ETF)
How to buy
How to buy SPDR S&P Biotech ETF (XBI)
- Open your brokerage app: Log into your brokerage account where you handle your investments.
- Search for the ETF: Enter the ticker symbol "XBI" or the ETF name into the search bar to bring up the ETF's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Holdings
Holdings of SPDR S&P Biotech ETF (XBI)
The SPDR S&P Biotech ETF (XBI) holds 142 stocks with a weighted average market cap of approximately $24.5 billion. Other important fund characteristics include estimated three- to five-year earnings per share (EPS) growth of around 10%, based on the underlying holdings of the fund.
Companies with larger market caps will have a more notable impact on the index. As of early 2025, the SPDR S&P Biotech ETF’s top 10 holdings are as follows:
- Neurocrine Biosciences (NASDAQ:NBIX ): 2.73%
- United Therapeutics (UTHR -0.71%): 2.49%
- Natera (NTRA 0.22%): 2.48%
- Incyte (INCY 1.06%): 2.46%
- AbbVie (ABBV 1.11%): 2.45%
- Gilead Sciences (GILD 0.38%): 2.44%
- Amgen (AMGN 0.72%): 2.43%
- Insmed (INSM 0.78%): 2.41%
- Alnylam Pharmaceuticals (ALNY -1.29%): 2.41%
- Vaxcyte (PCVX 0.07%): 2.37%
Should I invest?
Should I invest in SPDR S&P Biotech ETF (XBI)?
Making any investment is a personal decision. You need to make sure it aligns with your goals, values, and risk tolerance. There are numerous reasons you might want to invest in this biotech ETF. For example, perhaps you’re looking for an investment that can deliver returns that roughly match those of the S&P Biotechnology Select Industry Index, which represents the biotechnology subindustry portion of the S&P Total Market Index.
This ETF could also be a solid option if you want to invest in a diverse range of biotech companies without taking on the level of risk associated with putting cash into an individual biotech business. A single purchase of shares in this ETF, and you could automatically be diversified with holdings among some of the top innovators in the biotech industry. This ETF could also be an option for biotech investors looking for a relatively low-cost passive investment.
You should understand that while this ETF provides market returns, it also carries risk of volatility that will match market risk afflicting the broader universe of biotechnology stocks. It is important to understand that even the best biotech stocks can be among the most volatile across all market sectors, as they are highly dependent on the outcome of clinical trials as well as the safety and effectiveness of their therapies.
If you’re seeking investments that can deliver consistent, market-beating returns, you're a more risk-averse person and want an investment with lower volatility, or you're at or nearing retirement and need more income than this ETF can produce, you may wish to look elsewhere.
Dividend
Does SPDR S&P Biotech ETF (XBI) pay a dividend?
Yes, this ETF pays a quarterly dividend. The dividend yield is approximately 0.15% at the time of this article, which is notably less than the average stock trading on the S&P 500 (1.5%).
Expense ratio
What is SPDR S&P Biotech ETF (XBI)’s expense ratio?
This SPDR ETF has an expense ratio of 0.35% which is slightly below the average of around 0.5%. For a $10,000 investment in this ETF, the annual fee charged by the firm be about $35.
Expense Ratio
Historical performance
Historical performance of SPDR S&P Biotech ETF (XBI)
This ETF is designed to closely track the return of the S&P Biotechnology Select Industry Index. Let's see how the fund has delivered on that objective over the trailing one-, three-, five-, and 10-year periods.
| Fund Before Tax | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|
| Net Asset Value (NAV) | 1.10% | -6.90% | -1.02% | 3.97% |
| Market Value | 1.05% | -6.93% | -1.03% | 3.97% |
| Benchmark | 1.18% | -6.75% | -0.89% | 3.98% |
Related investing topics
The bottom line
The bottom line on SPDR S&P Biotech ETF
Biotech can be an incredible space to invest in for long-term investors with an understanding and interest in this space, as well as the risk-tolerance level to put cash to work in what is undoubtedly a volatile sector. Biotech companies often play a vital role in the development of new drugs and therapies that target the root causes of diseases, rare diseases for which there are few or no treatment options, and potentially offer more effective treatments with fewer side effects compared to traditional medications.
Biotech companies may tailor treatments based on an individual's genetic makeup, leading to more precise and potentially more effective therapies across disease areas including cancer, genetic illnesses, autoimmune disorders, and neurological diseases. Noting the positives of investing in this sector, which is well represented in this biotech ETF, it's also important to understand the risks involved.
Biotech investments can generate significant returns, but also carry a high degree of risk due to the uncertainty of drug development. These stocks can experience significant price fluctuations based on clinical trial results and regulatory news.
Anyone approaching biotech investment should not only have a long-term perspective and healthy risk tolerance, but also be willing to ride out events such as potential setbacks in drug development. The good news is that the SPDR S&P Biotech ETF (XBI) contains a wide range of biotech stocks, including established companies with both a promising pipeline and established portfolios of successful products.
With a diversified fund like this SPDR ETF, you can become part owner in numerous innovators in the biotech field without being too concentrated in a particular company. That could be an intriguing value proposition for some long-term investors who don't mind the volatility of this space.
FAQs
Investing in SPDR S&P Biotech ETF (XBI) FAQs
How can I invest in XBI?
You can buy shares of SPDR S&P Biotech ETF (XBI) through any brokerage account.
Is XBI a good ETF to buy?
For investors with a healthy risk appetite and an interest in putting cash into biotech stocks, the SPDR S&P Biotech ETF could be a solid addition to a well-diversified portfolio.
What stocks are in the XBI ETF?
The SPDR S&P Biotech ETF contains small-cap, mid-cap, and large-cap stocks across the biotech industry, including well-known companies such as AbbVie, Gilead Sciences, and Amgen.
