Top Biotech ETFs to Buy Now

Here are the five best biotech ETFs to invest in right now.

By Keith Speights – Updated Jan 26, 2026 at 8:49 PM EST | Fact-checked by Frank Bass

Key Points

Biotech ETFs offer diversified exposure to the sector, reducing investment risk.
Investing in top biotech ETFs can be cost-effective due to their low expense ratios.
Large biotech ETFs provide better liquidity, allowing easier trading of shares.
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Want to invest in an exciting and fast-growing sector? Biotech offers an opportunity to do so. Hundreds of biotech companies are hard at work developing innovative therapies. Some could even be game changers in preventing and treating diseases. Biotech exchange-traded funds (ETFs) own the stocks of companies that focus on the biotech sector.

Exchange-Traded Fund (ETF)

An exchange-traded fund, or ETF, allows investors to buy many stocks or bonds at once.

You could buy individual biotech stocks. The downside to that, though, is that many of them are very risky. Biotech ETFs allow you to lower your risk level and portfolio volatility.

A scientist looking through a microscope. — Image source: Getty Images.

Understanding biotech ETFs

ETFs are similar to mutual funds in that they can own lots of stocks (and sometimes other assets). Mutual funds, however, are only priced once per day, and you can only buy mutual funds through a brokerage or directly from the issuer.

On the other hand, ETFs trade on public exchanges just like individual stocks. And, like a stock, you can instantly buy or sell an ETF.

Investing in an ETF comes with a cost beyond just the transaction charge that a brokerage might require. The funds charge fees to cover their operating costs. The expense ratio of an ETF is calculated by dividing the fund's operating expenses by its average assets.

Biotech ETFs have all the characteristics of ETFs in general. The key difference is that these ETFs hold only the stocks of companies that focus on biotechnology.

Types of biotech ETFs

The types of biotech ETFs include:

Diversified biotech ETFs: Include large-cap, mid-cap, and small-cap biotech stocks, and can include large-cap pharmaceutical stocks.
Small-cap biotech ETFs: Focus only on small-cap biotech stocks.
Specialized biotech ETFs: Focus on specific areas of biotech, such as genomics.
Leveraged biotech ETFs: Use borrowing (leverage) to try to increase returns.

Best biotech ETFs in 2026

The best biotech ETFs tend to be the biggest ones. They have large amounts of assets under management and relatively low expense ratios. Here are five of the best biotech ETFs.

1. iShares Biotechnology ETF

NASDAQ: IBB

iShares Trust - iShares Biotechnology ETF

Today's Change

(0.14%) $0.25

Current Price

$174.05

Key Data Points

Day's Range

$172.48 - $175.63

52wk Range

$107.43 - $179.64

Volume

Total assets: $8.5 billion
Expense ratio: 0.44%
Dividend yield: 0.23%

The iShares Biotechnology ETF (IBB +0.14%) attempts to track the results of an index that includes all U.S.-listed stocks in the biotechnology sector. The ETF currently owns around 258 biotech stocks.

Among the iShares Biotechnology ETF's top holdings are some of the biggest biotech stocks based on market capitalization rank. They include Vertex Pharmaceuticals (VRTX +1.11%), Gilead Sciences (GILD +2.06%), Amgen (AMGN +8.05%), Regeneron Pharmaceuticals (REGN +2.17%), and Alnylam Pharmaceuticals (ALNY +0.02%).

Since its inception in 2001, the ETF has delivered an average annualized total return of 6.92%. Over the past five years, it has generated an annualized total return of 2.47%.

2. SPDR S&P Biotech ETF

NYSEMKT: XBI

SPDR Series Trust - SPDR S&P Biotech ETF

Today's Change

(-1.85%) $-2.36

Current Price

$125.29

Key Data Points

Day's Range

$123.41 - $128.31

52wk Range

$66.66 - $132.09

Volume

12M

Total assets: $8.2 billion
Expense ratio: 0.35%
Dividend yield: 0.35%

The SPDR S&P Biotech ETF (XBI -1.85%) seeks to track the S&P Biotechnology Select Industry Index. The index uses a modified equal weighting, which means the percentage of total assets for each stock owned is roughly the same. It gives investors exposure to large-cap, mid-cap, and small-cap biotech stocks.

The ETF currently owns around 153 stocks. Its top holdings include Revolution Medicines (RVMD +0.67%), Moderna (MRNA +1.27%), Amicus Therapeutics (FOLD -0.07%), Krystal Biotech (KRYS -3.66%), and Mirum Pharmaceuticals (MIRM -1.39%). However, because of its modified equal weighting, none of the largest positions in the ETF make up a significantly greater percentage of assets than other stocks.

The SPDR S&P Biotech ETF has delivered a total annualized return of about 10.9% since its inception in 2006. Over the past five years, however, the ETF generated an average annual return of negative 2.7%.

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3. Ark Genomic Revolution ETF

NYSEMKT: ARKG

Ark ETF Trust - Ark Genomic Revolution ETF

Today's Change

(-3.76%) $-1.14

Current Price

$29.18

Key Data Points

Day's Range

$28.45 - $30.36

52wk Range

$17.50 - $34.39

Volume

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Total assets: $1.2 billion
Expense ratio: 0.75%
Dividend yield: 0%

The Ark Genomic Revolution ETF (ARKG -3.76%) is one of several exchange-traded funds operated by Cathie Wood's Ark Invest. The fund invests in the stocks of companies that incorporate genomics into their businesses. It concentrates on gene-editing stocks, molecular diagnostics stocks, virtual care stocks, and the stocks of companies developing targeted therapeutics.

The ETF typically owns between 40 and 60 stocks. Its current top positions include Tempus AI (TEM -4.32%), CRISPR Therapeutics (CRSP -3.52%), Twist Bioscience (TWST +3.80%), Personalis (PSNL -9.67%), and Guardant Health (GH -6.28%).

The Ark Genomic Revolution ETF began trading in 2014. Since then, it has generated an average annual return of around 4%. Over the past five years, the ETF's annualized return has been a negative 20.8%.

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4. First Trust NYSE Arca Biotechnology Index Fund

NYSEMKT: FBT

First Trust Exchange-Traded Fund - First Trust Nyse Arca Biotechnology Index Fund

Today's Change

(-0.11%) $-0.24

Current Price

$213.00

Key Data Points

Day's Range

$211.58 - $214.50

52wk Range

$141.38 - $224.94

Volume

40K

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Total assets: $1.4 billion
Expense ratio: 0.54%
Dividend yield: 0%

The First Trust NYSE Arca Biotechnology Index Fund (FBT -0.11%) seeks to track the performance of the NYSE Arca Biotechnology Index. The index owns equal weights of the stocks of a cross-section of biotech companies, including those focused on genomics and developing monoclonal antibody-based technologies.

The ETF currently has 30 positions. Its top holdings include Moderna, Corecept Therapeutics (CORT -1.60%), BioNTech SE (BNTX +0.51%), Alkermes (ALKS -1.01%), and Gilead.

Since the ETF's inception in 2006, it has achieved an average annual total return of 12.8%. Over the past five years, the fund generated an annualized return of 4.3%.

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5. VanEck Biotech ETF

NASDAQ: BBH

VanEck ETF Trust - VanEck Biotech ETF

Today's Change

(1.48%) $2.88

Current Price

$197.88

Key Data Points

Day's Range

$196.08 - $198.53

52wk Range

$135.34 - $202.91

Volume

4.9K

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Total assets: $377 million
Expense ratio: 0.35%
Dividend yield: 0.49%

The VanEck Biotech ETF (BBH +1.48%) tries to own the most liquid biotech companies based on market cap and trading volume. As such, its approach tends to favor the biggest companies in the biotech sector. The ETF's portfolio can include U.S. companies, as well as foreign companies listed on U.S. stock exchanges.

The ETF currently owns 26 biotech stocks. Its top holdings include Amgen, Gilead Sciences, Vertex Pharmaceuticals, Regeneron, and Iqvia Holdings (IQV -0.88%).

The VanEck Biotech ETF was launched on Dec. 20, 2011. Since then, the fund has generated an annualized total return of about 13.1%. Over the past five years, the ETF's average annual return was close to 2.7%.

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Benefits and risks of investing in biotech ETFs

The benefits of investing in biotech ETFs include:

Diversification. Biotech ETFs own many biotech stocks. This reduces the risk of one big loser dragging down your returns.
Professional management. The biotech industry is complicated. Investing in biotech ETFs gives you access to professional managers who know the industry well.
Liquidity. Some individual biotech stocks aren't heavily traded. To sell these stocks quickly, you might have to accept a lower price. The larger biotech ETFs allow you to avoid this liquidity risk.

However, there are also several potential risks associated with investing in biotech ETFs, such as:

Overexposure to one sector. If you invest too heavily in biotech ETFs, your overall returns could be lower during periods when biotech stocks are out of favor.
Volatility. Biotech ETFs can be highly volatile because biotech stocks are often highly volatile.
Less control. Biotech ETFs could own biotech stocks that you don't like. Buying these funds reduces the level of control you have over your investments.

How to choose a biotech ETF

Consider the following factors when choosing a biotech ETF to buy:

Index methodology (market-cap weighting, equal weighting, or rule-based weighting).
Annual expense ratios.
Liquidity.
Performance history.
Fund manager's experience.

FAQ

Biotech ETFs FAQ

About the Author

Keith Speights is a contributing Motley Fool healthcare analyst covering publicly traded companies across pharmaceuticals, biotechnology, medical devices, technology, and marijuana. Prior to The Motley Fool, Keith was CEO of Constant Care Technology, a healthcare technology company; vice president of American HealthTech, a healthcare software company; and a director of operations for Blue Cross Blue Shield of Mississippi, a health insurer. He holds a B.S. in Industrial Engineering from Mississippi State University.

TMFFishBiz

Keith Speights has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Alkermes Plc, Alnylam Pharmaceuticals, Amgen, CRISPR Therapeutics, Corcept Therapeutics, Gilead Sciences, Guardant Health, Iqvia Holdings, Krystal Biotech, Mirum Pharmaceuticals, Moderna, Regeneron Pharmaceuticals, Twist Bioscience, and Vertex Pharmaceuticals. The Motley Fool recommends BioNTech Se and SPDR Series Trust - SPDR S&P Biotech ETF. The Motley Fool has a disclosure policy.