Biotechnology exchange-traded funds (ETFs) provide exposure to cutting-edge startup companies.
Meet Samuel – Your Personal Investing Prophet
- Start a conversation with TipRanks’ trusted, data-backed investment intelligence
- Ask Samuel about stocks, your portfolio, or the market and get instant, personalized insights in seconds
Biotechnology is the use of living systems, organisms, or biological processes to develop medicines and treatments that cure diseases and improve people’s health and lives. This can be a high-risk area of healthcare, but it is often the most rewarding for investors.
Many biotech companies take years to develop cutting-edge treatments for some of the most pressing diseases, from diabetes to cancer. Often, biotechnology companies are acquired by larger, more established pharmaceutical companies as their medications near commercialization.
ETFs offer investors exposure to the biotech sector without the hit-or-miss of picking individual stocks.
Leading Biotech ETFs
Examples of great biotech ETFs include Invesco’s (IVZ) Nasdaq Biotechnology ETF (IBBQ), which is a cost-effective alternative with a low expense ratio of 0.19%. There’s also the Global X Genomics & Biotechnology ETF (GNOM) that focuses on the niche market of genomics and gene editing.
For investors with a healthy appetite for risk, there is the ProShares Ultra NASDAQ Biotechnology ETF (BIB), which is a leveraged option seeking two times the daily returns of other biotech ETFs and intended for short-term trading.
Below is a comparison of these three ETFs. As one can see, each ETF has posted an impressive one-year return ranging from 31% to as high as 55%. This makes biotech ETFs a market outperformer when compared to the 17% return of the benchmark S&P 500 index in 2025.
