Best Biotech ETFs for 2026
Biotech ETFs give investors access to one of the most innovative and potentially rewarding corners of the healthcare sector. Biotechnology companies develop cutting-edge therapies including gene editing, mRNA platforms, immunotherapy, and rare disease treatments that can generate enormous returns when clinical trials succeed. However, the binary nature of drug development — where a single FDA decision can send a stock soaring or crashing — makes diversification through ETFs particularly valuable.
IBB from iShares is the benchmark biotech ETF, tracking the Nasdaq Biotechnology Index with a market-cap-weighted approach that tilts toward large, established biotech firms like Amgen, Gilead, and Vertex. XBI from SPDR takes an equal-weight approach, giving smaller clinical-stage biotechs equal footing with industry giants, which creates a higher-risk, higher-reward profile. ARKG, the ARK Genomic Revolution ETF, is actively managed by ARK Invest and focuses on genomics and genetic therapies, offering a more concentrated bet on the future of precision medicine.
Biotech investing requires patience and a strong stomach for volatility. The sector can underperform for extended periods during risk-off environments or when drug pipelines disappoint, but breakthroughs in areas like obesity treatments, cell therapy, and AI-driven drug discovery continue to create massive opportunities for the companies — and ETFs — positioned to benefit.
How We Rank
ETFs are ranked by assets under management (AUM). Only ETFs with $50M+ in assets are included. Data is updated daily.
| # | Symbol | Fund Name | AUM |
|---|---|---|---|
| 1 | XLV | State Street Health Care Select Sector SPDR ETF | $39.37B |
| 2 | IBB | iShares Biotechnology ETF | $8.50B |
| 3 | XBI | State Street SPDR S&P Biotech ETF | $7.79B |
| 4 | FBT | First Trust NYSE Arca Biotechnology Index Fund | $2.29B |
| 5 | ARKG | ARK Genomic Revolution ETF | $1.16B |
| 6 | LABU | Direxion Daily S&P Biotech Bull 3X ETF | $490.3M |
| 7 | BBH | VanEck Biotech ETF | $379.5M |
| 8 | PINK | Simplify Health Care ETF | $257.9M |
| 9 | PBE | Invesco Biotechnology & Genome ETF | $249.3M |
| 10 | CANC | Tema Oncology ETF | $142.2M |
| 11 | PSCH | Invesco S&P SmallCap Health Care ETF | $132.7M |
| 12 | IZRL | ARK Israel Innovative Technology ETF | $129.9M |
| 13 | DUNK | Dana Unconstrained Equity ETF | $122.1M |
| 14 | MJUS | ETFMG U.S. Alternative Harvest ETF | $111.6M |
| 15 | ITEQ | Amplify BlueStar Israel Technology ETF | $100.5M |
| 16 | LABD | Direxion Daily S&P Biotech Bear 3X ETF | $87.1M |
| 17 | BIB | ProShares - Ultra Nasdaq Biotechnology | $86.8M |
| 18 | SURI | Simplify Propel Opportunities ETF | $76.9M |
| 19 | LFSC | F/M Emerald Life Sciences Innovation ETF | $74.7M |
| 20 | IBBQ | Invesco Nasdaq Biotechnology ETF | $72.1M |
| 21 | HRTS | Tema Cardiovascular and Metabolic ETF | $56.6M |
| 22 | BBP | Virtus Biotech ETF | $50.5M |
What to Look For
Pay attention to the weighting methodology: market-cap-weighted funds like IBB are dominated by large profitable biotechs, while equal-weight funds like XBI have more exposure to small-cap clinical-stage firms. This dramatically affects volatility and return patterns. Expense ratios range from 0.35% for passive funds to 0.75% for active strategies.
Check the fund's pipeline exposure — how many holdings have late-stage clinical catalysts coming up — and review the concentration in top holdings. Also consider the fund's exposure to sub-sectors like genomics, oncology, or immunology based on which therapeutic areas you find most compelling.
Which Biotech ETFs Is Best for You?
IBB is the conservative biotech choice, dominated by large-cap profitable companies with approved drugs and strong revenue streams. Its market-cap weighting means firms like Amgen, Gilead, and Regeneron make up a significant portion of the portfolio. IBB tends to be less volatile than its peers and offers reasonable downside protection during biotech selloffs.
XBI is the high-octane alternative. Its equal-weight approach means a small biotech that doubles in value has the same impact as a mega-cap that moves a few percent. This makes XBI far more volatile but also gives it explosive upside potential during biotech rallies, particularly when M&A activity heats up and small biotechs get acquired at premiums.
ARKG offers a differentiated, actively managed approach focused on genomic revolution themes. The fund concentrates on companies involved in CRISPR gene editing, targeted therapeutics, bioinformatics, and molecular diagnostics. While its active management introduces higher fees and manager risk, it provides access to a curated portfolio of next-generation biotech innovators.