Is State Street SPDR S&P Biotech ETF (XBI) a Strong ETF Right Now?

The State Street SPDR S&P Biotech ETF (XBI) made its debut on 01/31/2006, and is a smart beta exchange traded fund that provides broad exposure to the Health Care ETFs category of the market.What Are Smart Beta ETFs?For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexThe fund is managed by State Street Investment Management. XBI has been able to amass assets over $7.49 billion, making it one of the largest ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the S&P Biotechnology Select Industry Index before fees and expenses.The S&P Biotechnology Select Industry Index represents the biotechnology sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Biotech Index is a modified equal weight index.Cost & Other ExpensesInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.It's 12-month trailing dividend yield comes in at 0.04%.Sector Exposure and Top HoldingsMost ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.Representing 100% of the portfolio, the fund has heaviest allocation to the Healthcare sector.Looking at individual holdings, Crispr Therapeutics Ag (CRSP) accounts for about 2.48% of total assets, followed by Moderna Inc (MRNA) and Insmed Inc (INSM).Its top 10 holdings account for approximately 19.54% of XBI's total assets under management.Performance and RiskThe ETF has gained about 27.94% and it's up approximately 25.3% so far this year and in the past one year (as of 11/19/2025), respectively. XBI has traded between $69.80 and $115.18 during this last 52-week period. XBI has a beta of 0.95 and standard deviation of 27.12% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 136 holdings, it effectively diversifies company-specific risk .AlternativesState Street SPDR S&P Biotech ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.First Trust NYSE Arca Biotechnology ETF (FBT) tracks NYSE Arca Biotechnology Index and the iShares Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. First Trust NYSE Arca Biotechnology ETF has $1.24 billion in assets, iShares Biotechnology ETF has $7.56 billion. FBT has an expense ratio of 0.54% and IBB changes 0.44%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFsBottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street SPDR S&P Biotech ETF (XBI): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks