The 5 Best Biotech ETFs of 2024

A laggard in 2023, biotechnology is a market leader in 2024.

kent
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Research Lead
Reviewed by: etf.com Staff
,
Edited by: Ron Day

After putting in single-digit gains for all of 2023, the top-performing biotech funds have jumped double digits in just the past three months, making them market leaders in 2024.  

In this article, we spotlight the best biotech ETFs of 2024 by performance and provide education on how these exchange-traded funds invest. 

What Is a Biotech ETF?

A biotech ETF is an exchange-traded fund that tracks an index of publicly traded biotechnology companies. The typical biotech company uses biological processes to develop new products and services, such as drugs, vaccines, or medical devices. Thus, biotechnology ETFs offer investors a way to invest in the biotechnology sector without having to pick individual stocks themselves.

Investing in biotech ETFs is accessible and cost effective for almost any type of investor. ETFs are traded like stocks, which means investors can buy and sell them throughout the day. Additionally, the management fees for ETFs are typically lower than mutual funds, making them a more cost-effective investment option.  

Best Biotech ETFs of 2024 by Performance

TickerFund3-mo ReturnAUMExpense Ratio
SBIOAlps Medical Breathroughs ETF40.92%$122.6M0.50%
XBISPDR S&P Biotech ETF30.47%$8.2B0.35%
BBPVirtusLifeSci Biotech Products ETF16.16%$21.2M0.79%
IBBiShares Biotechnology ETF14.15%$7.8B0.45%
PBEInvesco Dynamic Biotechnology & Genome ETF 12.63%$271.1M0.58%

Data as of March 1, 2024. Leveraged and inverse ETFs were not included in our list because they are not generally suitable for the typical investor. 

ALPS Medical Breakthroughs ETF

The ALPS Medical Breakthroughs ETF (SBIO) tracks, a market-cap weighted index of biotech companies with one or more drugs currently in either Phase II or Phase III Food and Drug Administration (FDA) clinical trials. This makes SBIO a high-risk, high-reward investment as it is a concentrated portfolio exposed to small-cap and micro-cap biotechnology companies. 

  • 3-month return: 40.92% 
  • Assets under management: $122.6 million 
  • Expense ratio: 0.50% 
  • As of date: March 1, 2024 

SPDR S&P Biotech ETF

The SPDR S&P Biotech ETF (XBI) seeks to track the S&P Biotechnology Select Industry Index, which is an equal-weighted index of U.S. biotech stocks. The equal weighting adds exposure to small cap biotechs, namely Viking Therapeutics, Inc. (VKTX), which jumped more than 550% over the past three months. Unlike some category peers, XBI is a pure biotech play, with relatively small pharma exposure. 

  • 3-month return: 30.47% 
  • Assets under management: $8.2 billion 
  • Expense ratio: 0.35% 
  • As of date: March 1, 2024 

Virtus LifeSci Biotech Products ETF

The Virtus LifeSci Biotech Products ETF (BBP) tracks an index of U.S.-listed biotechnology companies considered to be in the “product stage” by the index provider. To be included in the portfolio, stocks must earn most of their revenue from the research and development and/or marketing and sale of novel drugs or other therapeutics used in the treatment of human diseases. 

  • 3-month return: 16.16%  
  • Assets under management: $21.2 million  
  • Expense ratio: 0.79%  
  • As of date: March 1, 2024 

iShares Biotechnology ETF

The iShares Biotechnology ETF (IBB) tracks the performance of a modified market-cap-weighted index of U.S. biotechnology companies listed on U.S. exchanges. This includes companies that are engaged in the production of tools or systems that enable biotechnology processes, as well as companies engaged in the research and development of therapeutic treatments. 

  • 3-month return: 14.15% 
  • Assets under management: $7.8 billion 
  • Expense ratio: 0.45% 
  • As of date: March 1, 2024 

Invesco Dynamic Biotechnology & Genome ETF

The Invesco Dynamic Biotechnology & Genome ETF (PBE) tracks a tiered equal-weighted index of companies principally engaged in biotechnology and genetic engineering. Thus, although the PBE portfolio includes companies that benefit significantly from advances in biotech and genetic engineering, the fund is not a pure-play biotech ETF. 

  • 3-month return: 12.63% 
  • Assets under management: $271.1 million  
  • Expense ratio: 0.58% 
  • As of date: March 1, 2024 

Bottom Line on Investing in Biotech ETFs

Investing in biotech ETFs can provide investors with exposure to the dynamic and rapidly growing biotechnology industry, while also reducing the risks associated with investing in individual biotech stocks. However, investors should keep in mind that biotech investments can produce elevated volatility compared to the broader stock market indices, especially in the short term. 

Kent Thune is Research Lead for etf.com, focusing on educational content, thought leadership, content management and search engine optimization. Before joining etf.com, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger. 

 

Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship. 

 

Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.