Should You Invest in the SPDR S&P Biotech ETF (XBI)?

Looking for broad exposure to the Healthcare - Biotech segment of the equity market? You should consider the SPDR S&P Biotech ETF (XBI), a passively managed exchange traded fund launched on January 31, 2006.An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $6.22 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Biotech segment of the equity market. XBI 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.CostsCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.It has a 12-month trailing dividend yield of 0.04%.Sector Exposure and Top HoldingsETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.Looking at individual holdings, Alnylam Pharmaceuticals Inc (ALNY) accounts for about 3.47% of total assets, followed by Insmed Inc (INSM) and United Therapeutics Corp (UTHR).The top 10 holdings account for about 28.22% of total assets under management.Performance and RiskThe ETF has added roughly 16.62% so far this year and was up about 9.16% in the last one year (as of 10/13/2025). In that past 52-week period, it has traded between $69.8 and $106.52.The ETF has a beta of 0.93 and standard deviation of 27.77% for the trailing three-year period, making it a high risk choice in the space. With about 128 holdings, it effectively diversifies company-specific risk.AlternativesSPDR S&P Biotech ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XBI is a sufficient option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.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 $1.10 billion in assets, iShares Biotechnology ETF has $6.21 billion. FBT has an expense ratio of 0.54%, and IBB charges 0.44%.Bottom 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 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