5 Biggest Biotechnology ETFs in 2023

metal bull and bear figurines in the foreground with the letters "etf" in the background

For investors looking for less volatility compared to stocks, here’s an overview of the five largest biotechnology ETFs for consideration.

Investing in the biotech industry can be a long road to gains given the sector’s volatility.

Even with a good understanding of the system, no one can predict which treatment, device or therapy will give the biggest return, making biotech exchange-traded funds (ETFs) a more secure option than individual biotech stocks.

An ETF is a relatively safe investment route that can minimize losses while offering exposure to multiple companies instead of focusing on the gains and losses of a single biotech stock. With that in mind, here’s a brief look at the five top biotechnology ETFs by total assets. Data was sourced from ETFdb.com on May 31, 2023, and all data was current as of that time.

1. iShares NASDAQ Biotechnology ETF (NASDAQ:IBB)

Total assets: US$7.87 billion

The iShares NASDAQ Biotechnology ETF was launched on February 5, 2001, and tracks 264 holdings. This iShares ETF is a diversified fund in that it provides exposure to biotechnology, pharmaceutical and life science tools and services. Its overarching investment goal is to track NASDAQ-listed companies focused on these areas.

Its top three holdings are: Vertex Pharmaceuticals (NASDAQ:VRTX), weighted at 8.08 percent; Gilead Sciences (NASDAQ:GILD) with a 7.63 percent weight; and Amgen (NASDAQ:AMGN) at a weight of 7.6 percent.

2. SPDR S&P Biotech ETF (ARCA:XBI)

Total assets: US$6.53 billion

Established on February 6, 2006, the SPDR S&P Biotech ETF is a largely balanced fund in terms of weight that focuses mostly on biotech companies with some pharmaceutical companies. As noted by ETF.com, it focuses on small- and micro-cap companies, which makes the weight of each holding smaller than the holdings of other ETFs in this sector.

The SPDR S&P Biotech ETF has 149 companies in its portfolio, with the top three being: ImmunoGen (NASDAQ:IMGN), which has a 2.48 percent weighting; TG Therapeutics (NASDAQ:TGTX), weighted at 1.7 percent; and Iveric Bio (NASDAQ:ISEE), with a 1.54 percent weight.

3. ARK Genomic Revolution Multi-Sector ETF (ARCA:ARKG)

Total assets: US$2.07 billion

The ARK Genomic Revolution Multi-Sector ETF came into existence on October 31, 2014, and tracks 45 holdings. This ETF follows companies that develop products such as CRISPR technology, bioinformatics, molecular diagnostics and stem cells.

This top biotechnology ETF's three most significant company holdings are: Exact Sciences (NASDAQ:EXAS), weighted at 11.04 percent; Pacific Biosciences (NASDAQ:PACB) at a weight of 6.7 percent; and Schrodinger (NASDAQ:SDGR) at 6.56 percent.

4. First Trust NYSE Arca Biotechnology Index (ARCA:FBT)

Total assets: US$1.5 billion

The First Trust NYSE Arca Biotechnology ETF entered the market on June 23, 2006, and aims to track the NYSE Arca Biotechnology Index as closely as it can. Companies in this fund are generally involved in areas such as recombinant DNA technology, molecular biology, genetic engineering and genomics.

The fund has only 31 holdings; this means they are largely equally weighted. The top three holdings of the fund are the following large-cap companies: Exact Sciences at a 4.14 percent weighting; Acadia Pharmaceuticals (NASDAQ:ACAD) representing a 4.07 percent weight, and Ultragenyx Pharmaceutical (NASDAQ:RARE), coming in at a 3.91 percent weight.

5. Direxion Daily S&P Biotech Bull 3x Shares ETF (ARCA:LABU)

Total assets: US$1.11 billion

Founded on May 28, 2015, the Direxion Daily S&P Biotech Bull 3x Shares ETF does not mirror an index. Instead, its goal is to obtain daily investment results of at least 300 percent of the S&P Biotechnology Select Industry Index.

Like some of the other ETFs on this list, companies in the Direxion Daily S&P Biotech Bull 3x Shares ETF have an equally weighted average. Its top holdings include: ImmunoGen, which has a 2.03 percent weight; Prometheus Biosciences (NASDAQ:RXDX) with a weight of 1.3 percent; and Viking Therapeutics (NASDAQ:VKTX) at a weight of 1.23 percent.

This is an updated version of an article first published by the Investing News Network in 2016.

Don’t forget to follow us @INN_LifeScience for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

The Conversation (0)

How to Invest in Biotech:


S&P 5004274.51+0.98


Heating Oil3.28+0.02
Natural Gas2.900.00